Multiple choice

In a balance sheet prepared after the new partnership agreement, assets and liabilities are recorded at

  1. original value

  2. revalued figure

  3. realisable value

  4. current cost
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When preparing a balance sheet after a new partnership agreement, assets and liabilities must be recorded at revalued figures to reflect their current fair value. This ensures that the new partner's capital account is based on accurate asset values, and any appreciation or depreciation is properly adjusted among partners. Original value, realisable value, and current cost accounting concepts are not the correct basis for this revaluation.

Keep practicing — related questions