Partnership

Admission

Medium

common

At the time of admission of partner ,Workmen Compensation Claim Exceeding Workmen Compensation Fund is transferred to

Debit of partner capital account.

Credit of partner capital account.

Debit of revaluation account.

Credit of revaluation account.

✅ Correct Option: 3

When a Workmen Compensation Claim exceeds the Workmen Compensation Fund, it means the actual liability is more than what was provided for.

Understanding the situation:

Workmen Compensation Fund created = ₹50,000 (assumed)

Actual Workmen Compensation Claim = ₹70,000 (assumed)

Excess/Shortfall = ₹20,000

This excess represents an unrecorded loss for the old partners, as they had not provided enough for the liability.

Treatment:

All unrecorded losses discovered at the time of admission are transferred to the Debit side of Revaluation Account. This loss will ultimately be borne by the old partners in their old profit-sharing ratio through the Revaluation Account.

Journal Entry:

Revaluation Account                     Dr.     20,000
Workmen Compensation Fund               Dr.     50,000
    To Workmen Compensation Claim                      70,000

The excess claim amount is debited to Revaluation Account as it represents an additional loss that needs to be adjusted before the new partner is admitted.

Correct Answer: Option 3 - Debit of revaluation account

2025: 22 May Shift 2

Goodwill can also be ascertained by capitalising the super profit directly under which method?

2025: 13 May Shift 1

X, Y and Z are partners in a firm. If M is admitted as a new partner, what would be its implication?

2026: 21 May Shift 2

Find out gain or loss of Revaluation A/c from the given information:

The fixed assets should be valued at Rs. 3,31,000 (book value Rs. 2,80,000).
A provision of 5% on sundry debtors be made doubtful debts (Debtors amounted to Rs. 90,000).
The value of stock be reduced to Rs. 1,12,000 (book value 1,90,000).

2023: 20 June Shift 2

Arrange the following statements in proper sequence in context of admission of partner.

A. Finalising terms for admission of new partner

B. Calculation of sacrificing/ gaining ratio

C. Finalising balance in partner's capital A/c

D. Calculation of new profit sharing ratio

E. Valuation and adjustment of goodwill

Choose the correct answer from the options given below:

2025: 13 May Shift 2

Which of the following factors leads to a higher goodwill for firms?

(A) Firms having long term contracts for supply of materials

(B) Firms with efficient management

(D) Firms which do not have competitive advantages

Choose the correct answer from the options given below:

2026: 21 May Shift 2

Which of the following needs no adjustments in the books of firm at the time of admission of a new partner?

At the time of admission of partner ,Workmen Compensation Claim Exceeding Workmen Compensation Fund is transferred to

Solution

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