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Partnership Accounts  
Admission of a New Partner 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 3 
Prof. Deepak Jaggi 
Page 2


Partnership Accounts  
Admission of a New Partner 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 3 
Prof. Deepak Jaggi 
Learning Objectives 
 
(1) Understand the reasons for which revaluation  or assets 
and liabilities is done. 
(2) Logic of treatment of Reserves and Debit Balances in case 
of admission of partner. 
(3) Techniques of arriving at the various Ratio’s. 
(4) Understand the Goodwill adjustment. 
(5) To Lay a solid foundation of accounting treatment in case of 
admission of partner. 
Page 3


Partnership Accounts  
Admission of a New Partner 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 3 
Prof. Deepak Jaggi 
Learning Objectives 
 
(1) Understand the reasons for which revaluation  or assets 
and liabilities is done. 
(2) Logic of treatment of Reserves and Debit Balances in case 
of admission of partner. 
(3) Techniques of arriving at the various Ratio’s. 
(4) Understand the Goodwill adjustment. 
(5) To Lay a solid foundation of accounting treatment in case of 
admission of partner. 
Partnership Accounts 
(Admission of a Partner) 
When 2 or more Partners are already doing 
business & they admit 1 more partner into their 
running business it is a case of Admission of a 
Partner  
Cont.… 
Page 4


Partnership Accounts  
Admission of a New Partner 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 3 
Prof. Deepak Jaggi 
Learning Objectives 
 
(1) Understand the reasons for which revaluation  or assets 
and liabilities is done. 
(2) Logic of treatment of Reserves and Debit Balances in case 
of admission of partner. 
(3) Techniques of arriving at the various Ratio’s. 
(4) Understand the Goodwill adjustment. 
(5) To Lay a solid foundation of accounting treatment in case of 
admission of partner. 
Partnership Accounts 
(Admission of a Partner) 
When 2 or more Partners are already doing 
business & they admit 1 more partner into their 
running business it is a case of Admission of a 
Partner  
Cont.… 
Example 
Partners already doing business- A and B = Old Partners 
Partner Admitted Now – C = Incoming Partner 
All the three partners together – A, B & C = New Partners 
Page 5


Partnership Accounts  
Admission of a New Partner 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 3 
Prof. Deepak Jaggi 
Learning Objectives 
 
(1) Understand the reasons for which revaluation  or assets 
and liabilities is done. 
(2) Logic of treatment of Reserves and Debit Balances in case 
of admission of partner. 
(3) Techniques of arriving at the various Ratio’s. 
(4) Understand the Goodwill adjustment. 
(5) To Lay a solid foundation of accounting treatment in case of 
admission of partner. 
Partnership Accounts 
(Admission of a Partner) 
When 2 or more Partners are already doing 
business & they admit 1 more partner into their 
running business it is a case of Admission of a 
Partner  
Cont.… 
Example 
Partners already doing business- A and B = Old Partners 
Partner Admitted Now – C = Incoming Partner 
All the three partners together – A, B & C = New Partners 
Reasons for Admission  of Partner 
 Additional capital required 
Specialized skill of the incoming partner 
Expansion of Business 
Avoiding competition 
Conti.. 
Read More
41 videos|106 docs|56 tests

FAQs on PPT : Admission of a new partner - Accountancy Class 12 - Commerce

1. What is the admission of a new partner in a business?
Ans. Admission of a new partner in a business refers to the process of adding a new member to the existing partnership. It is a way of expanding the business and sharing profits and losses with the new partner.
2. What are the benefits of admitting a new partner in a business?
Ans. Admitting a new partner in a business has several benefits, such as: - Increased capital and resources for the business - Sharing of risks and responsibilities - Access to new skills, knowledge, and expertise - Increased credibility and reputation of the business - Improved decision-making and problem-solving abilities
3. How is the admission of a new partner determined in a partnership firm?
Ans. The admission of a new partner is determined by mutual agreement among the existing partners and the new partner. The terms and conditions of the partnership, such as the amount of capital to be contributed, profit-sharing ratio, liabilities, and responsibilities of the new partner, are discussed and agreed upon.
4. What are the possible challenges of admitting a new partner in a business?
Ans. Admitting a new partner in a business can bring certain challenges, such as: - Conflict of interests and differences in opinions - Dilution of control and decision-making power - Disruption in the existing work culture and practices - Legal and financial complexities in drafting new partnership agreements and contracts
5. What is the process of admitting a new partner in a partnership firm?
Ans. The process of admitting a new partner in a partnership firm involves the following steps: - Discussion and negotiation of terms and conditions among the existing partners and the new partner - Preparation of a new partnership agreement or amendments to the existing agreement - Registration of the new partnership with the concerned authorities - Transfer of the new partner's capital contribution and sharing of profits and losses according to the agreed-upon ratio.
41 videos|106 docs|56 tests
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