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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): On admission of a new partner, Assets and liabilities are revalued.
Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
At the time of admission of a new partner, the assets are revalued and liabilities are reassessed. The assets are revalued and liabilities are reassessed so that: The assets are overstated or understated are revalued. The liabilities are brought in the books at their correct values.
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Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): On admission of a new partner, Assets and liabilities are revalued.
Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.
The correct answer is option 'A', which states that both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Explanation:
When a new partner is admitted into a partnership firm, it is necessary to revalue the assets and liabilities of the firm. This is done to ensure that the financial position of the firm is accurately reflected and to determine the capital held by the partners at the time of admission.
Reason (R)
The reason behind revaluing the assets and liabilities is to show the proper financial position of the firm and the capital held by the partners at the time of admission. This is because the admission of a new partner affects the existing partners' capital and the overall capital structure of the firm.
Importance of Revaluation:
Revaluing the assets and liabilities helps in the following ways:
1. Determine the Realizable Value: By revaluing the assets and liabilities, the firm can determine their current market value. This provides a more accurate representation of the firm's financial position.
2. Adjusting the Capitals: The revaluation helps in adjusting the capital accounts of the existing partners as well as the capital to be brought in by the new partner. This ensures that the capital contribution of each partner is in proportion to their share in the partnership.
3. Equal Distribution of Gains or Losses: Revaluation helps in ascertaining the gains or losses arising due to the admission of a new partner. These gains or losses can be distributed among the existing partners in their profit sharing ratio.
4. Transparency and Accountability: Revaluation ensures transparency and accountability in the financial statements of the firm. It reflects the true value of the firm's assets and liabilities, making the financial position more reliable for stakeholders.
5. Basis for Future Decision Making: The revalued figures provide a more accurate basis for future decision making, such as determining the purchase price of a partner's interest, calculating goodwill, or making arrangements for retirement or death of a partner.
In conclusion, the revaluation of assets and liabilities is an important step when admitting a new partner into a partnership firm. It helps in showing the true financial position of the firm and determining the capital held by the partners at the time of admission.
Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.
The correct answer is option 'A', which states that both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Explanation:
When a new partner is admitted into a partnership firm, it is necessary to revalue the assets and liabilities of the firm. This is done to ensure that the financial position of the firm is accurately reflected and to determine the capital held by the partners at the time of admission.
Reason (R)
The reason behind revaluing the assets and liabilities is to show the proper financial position of the firm and the capital held by the partners at the time of admission. This is because the admission of a new partner affects the existing partners' capital and the overall capital structure of the firm.
Importance of Revaluation:
Revaluing the assets and liabilities helps in the following ways:
1. Determine the Realizable Value: By revaluing the assets and liabilities, the firm can determine their current market value. This provides a more accurate representation of the firm's financial position.
2. Adjusting the Capitals: The revaluation helps in adjusting the capital accounts of the existing partners as well as the capital to be brought in by the new partner. This ensures that the capital contribution of each partner is in proportion to their share in the partnership.
3. Equal Distribution of Gains or Losses: Revaluation helps in ascertaining the gains or losses arising due to the admission of a new partner. These gains or losses can be distributed among the existing partners in their profit sharing ratio.
4. Transparency and Accountability: Revaluation ensures transparency and accountability in the financial statements of the firm. It reflects the true value of the firm's assets and liabilities, making the financial position more reliable for stakeholders.
5. Basis for Future Decision Making: The revalued figures provide a more accurate basis for future decision making, such as determining the purchase price of a partner's interest, calculating goodwill, or making arrangements for retirement or death of a partner.
In conclusion, the revaluation of assets and liabilities is an important step when admitting a new partner into a partnership firm. It helps in showing the true financial position of the firm and determining the capital held by the partners at the time of admission.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): On admission of a new partner, Assets and liabilities are revalued.Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): On admission of a new partner, Assets and liabilities are revalued.Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): On admission of a new partner, Assets and liabilities are revalued.Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): On admission of a new partner, Assets and liabilities are revalued.Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): On admission of a new partner, Assets and liabilities are revalued.Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): On admission of a new partner, Assets and liabilities are revalued.Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): On admission of a new partner, Assets and liabilities are revalued.Reason (R): Assets and liabilities are revalued so as to show the proper financial position of the firm and the capital held by the partners at the time of admission.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
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