Question

At the time of admission of a partner when Partners' Capital Accounts are maintained following Fixed Capital Accounts Method, Unrecorded Assets or Liabilities are transferred to:

• A. Old Partners' Current Accounts
• B. Old Partners' Capital Accounts
• C. Revaluation Account
• D. Goodwill Account

Hint:

During admission of a partner: \[ \mathrm{Unrecorded\ Assets/Liabilities} \rightarrow \mathrm{Revaluation\ Account} \]

Answer 1

The Correct Option is C

Concept: At the time of admission of a partner, unrecorded assets and liabilities are brought into books through the Revaluation Account. The Revaluation Account is prepared to:
• Record increase or decrease in asset values
• Record unrecorded assets and liabilities
• Determine revaluation profit or loss

Step 1: Understand the treatment of unrecorded items.
Unrecorded assets and liabilities affect the value of firm's assets and liabilities. Therefore, they are recorded through: \[ \boxed{\mathrm{Revaluation\ Account}} \]

Step 2: Analyze the remaining options.
Old Partners' Current Accounts Current accounts receive the final share of profit or loss, not direct transfer of unrecorded items. \[ \Rightarrow \mathrm{Incorrect} \] Old Partners' Capital Accounts Capital accounts are adjusted after revaluation profit or loss is determined. \[ \Rightarrow \mathrm{Incorrect} \] Goodwill Account Goodwill account records goodwill adjustments only. \[ \Rightarrow \mathrm{Incorrect} \]

Step 3: Identify the correct option.
Thus, unrecorded assets or liabilities are transferred to: \[ \boxed{\mathrm{Revaluation\ Account}} \] Hence, the correct answer is: \[ \boxed{\mathrm{(C)}} \]