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Choose the correct sequence of steps related to admission of a new partner.

(A) Prepare Revaluation Account.

(B) Prepare Balance Sheet.

(C) Calculation of sacrificing ratio.

(D) Prepare Partners' Capital Account.

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 1

The sacrificing ratio is computed first since goodwill treatment depends on it (C). Assets and liabilities are then revalued through the Revaluation Account (A). The revaluation result, goodwill and reserves are then posted to the Partners' Capital Accounts (D). The new Balance Sheet is drawn up last (B).

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