Chapter 3: Admission of a Partner
Admission of a partner refers to the process of including a new partner into an existing partnership firm. This can happen due to various reasons such as the need for additional capital, expertise, or to expand the business.

Benefits of admitting a partner:
- Increased capital: A new partner brings in additional funds which can help in the growth of the business.
- Diversification of skills: The new partner may bring in new skills and expertise that can benefit the firm.
- Shared responsibilities: With more partners, the workload can be divided, leading to better efficiency.

Procedure for admission of a partner:
1. Agreement: The existing partners must agree on the terms and conditions of admitting a new partner.
2. Revaluation of assets and liabilities: The existing assets and liabilities of the firm need to be revaluated to determine the new partner's share.
3. Adjustment of goodwill: Goodwill is adjusted among the existing partners to accommodate the new partner.
4. Preparation of a new balance sheet: A new balance sheet is prepared reflecting the changes due to the admission of the new partner.
5. Treatment of reserves and accumulated profits: Reserves and profits are adjusted based on the terms of the agreement.

Accounting treatment:
- The new partner's capital contribution is credited to his capital account.
- Goodwill is adjusted among the existing partners.
- Revaluation of assets and liabilities is done to reflect the new partner's share.
Admitting a partner involves careful consideration of various factors to ensure a smooth transition and benefit the firm in the long run.