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How unrecorded assets are treated at the time of retirement of a partner?
- a)Credited to revaluation account
- b)Credited to capital account of retiring partner only
- c)Debited to revaluation account
- d)Credited to partner’s capital account
Correct answer is option 'A'. Can you explain this answer?
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How unrecorded assets are treated at the time of retirement of a partn...
(a) Credited to revaluation account.
Unrecorded assets refer to assets that were not included in the books of accounts and financial statements. These assets may include goodwill, patents, trademarks, or any other intangible assets that may have been acquired by the partnership but were not recognized in the books.
At the time of retirement of a partner, the unrecorded assets are adjusted and their value is recognized in the books. This adjustment is made by crediting the revaluation account. The revaluation account is a nominal account that is used to record the adjustments made to the assets and liabilities of the partnership at the time of retirement of a partner.
Once the adjustment is made, the balance in the revaluation account is transferred to the capital accounts of all the partners including the retiring partner in their profit sharing ratio. This ensures that the retiring partner gets his or her share of the unrecorded assets.
Unrecorded assets refer to assets that were not included in the books of accounts and financial statements. These assets may include goodwill, patents, trademarks, or any other intangible assets that may have been acquired by the partnership but were not recognized in the books.
At the time of retirement of a partner, the unrecorded assets are adjusted and their value is recognized in the books. This adjustment is made by crediting the revaluation account. The revaluation account is a nominal account that is used to record the adjustments made to the assets and liabilities of the partnership at the time of retirement of a partner.
Once the adjustment is made, the balance in the revaluation account is transferred to the capital accounts of all the partners including the retiring partner in their profit sharing ratio. This ensures that the retiring partner gets his or her share of the unrecorded assets.
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How unrecorded assets are treated at the time of retirement of a partner?a)Credited to revaluation accountb)Credited to capital account of retiring partner onlyc)Debited to revaluation accountd)Credited to partner’s capital accountCorrect answer is option 'A'. Can you explain this answer?
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How unrecorded assets are treated at the time of retirement of a partner?a)Credited to revaluation accountb)Credited to capital account of retiring partner onlyc)Debited to revaluation accountd)Credited to partner’s capital accountCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about How unrecorded assets are treated at the time of retirement of a partner?a)Credited to revaluation accountb)Credited to capital account of retiring partner onlyc)Debited to revaluation accountd)Credited to partner’s capital accountCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for How unrecorded assets are treated at the time of retirement of a partner?a)Credited to revaluation accountb)Credited to capital account of retiring partner onlyc)Debited to revaluation accountd)Credited to partner’s capital accountCorrect answer is option 'A'. Can you explain this answer?.
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