Partnership

Admission

Easy

common

While doing adjustment of partners capital, for the amount of capital to be brought in by the partner, the following entry will be passed:

Bills payable A/c Dr.

To Partners' Capital A/c

Partners' Capital A/c Dr.

To Cash / Bank A/c

Partners' Capital A/c Dr.

To Bills payable A/c

Cash / Bank A/c Dr.

To Partners' Capital A/c

✅ Correct Option: 4

When a partner brings in additional capital to the firm during capital adjustment, the firm receives cash or bank balance, and in return, the partner's capital account needs to be credited for the increased stake.

Journal Entry:

Particulars	Debit	Credit
Cash/Bank A/c Dr.	✓
To Partners' Capital A/c		✓

Accounting Logic:

Cash/Bank A/c is debited → Asset coming into the business (Debit what comes in)

Partners' Capital A/c is credited → Capital/liability of the firm increases (Credit the giver)

When capital is brought in, it's similar to a fresh investment by the partner. The firm's bank balance increases (asset ↑) and the partner's claim on the business increases (capital ↑).

Why other options are incorrect:

Option 2 shows the reverse entry (Capital Dr. to Cash/Bank Cr.), which would record capital withdrawal, not capital introduction.

Options 1 and 3 incorrectly involve Bills Payable, which is unrelated to capital adjustments between partners.

2025: 27 May Shift 2

What are the main factors affecting the value of goodwill?

(A) Nature of business

(B) Location

(D) Market situation

Choose the correct answer from the options given below:

2026: 13 May Shift 1

Ajay and Bharat are partners in a firm. Their profit sharing ratio is 3:2. They admitted Chetan for 25% share of profit. Building is to be depreciated by 20% (Book Value Rs. 50,000) and the machinery would be appreciated by 10% (Book Value Rs. 40,000), an unrecorded Debtor of Rs. 1000 would be brought into the firm's books. What was Bharat's share of revaluation profit/loss :-

2026: 11 May Shift 1

Where will the profit or loss on Revaluation Account be transferred to?

2026: 12 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Goodwill	(I) Amount brought by new partner to compensate old partners
(B) Sacrificing ratio	(II) Advantage of reputation, enabling firm to earn super profits
(C) New profit sharing ratio	(III) Ratio in which old partner give up their share
(D) Premium for Goodwill	(IV) Ratio after reconstitution of partnership

Choose the correct answer from the options given below:

2026: 23 May Shift 2

If the furniture is shown as Rs. 15,000 in the balance sheet and is revalued at Rs. 12,000, then the journal entry for the same will be:

2025: 30 May Shift 2

At the time of admission of a partner, undistributed profits appearing in the balance sheet of the old firm is transferred to the capital account of:

While doing adjustment of partners capital, for the amount of capital to be brought in by the partner, the following entry will be passed:

Solution

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