Is memorandum revaluation account in the 5th chapter there for board exam?
Dear Student,
The syllabus issued by CBSE for the current academic session does not explicitly state whether Memorandum Revaluation A/c is excluded/included for March 2020 examination.Analysing the trends in the board papers of last few years, there has been no question on this topic. But still,this topic is covered in the book syllabus. So, why take a risk. So, I have explained the preparation of this account below for your understanding.
Memorandum Revaluation Account is an account that is prepared at the time of reconstitution of a partnership firm. This account is divided into two parts. The first part is same as Revaluation Account in which any decrease in assets and increase in liabilities is recorded on the debit side and increase in assets and decrease in liabilities is recorded on the credit side of the account. The profit or loss from the revaluation is transferred to the Old partners- for admission (or All Partners- for retirement and death) in their old ratio. In the second part of this account, whatever is debited in the first part is credited and in the similar manner, whatever is credited above is debited. Accordingly, if in the first part there exists a profit then naturally there will be loss in the second part and vice-versa. The profit or loss from this part is transferred to the All Partners’ Capital Accounts- for admission (including new partner) in the new ratio and in case of retirement/death it is transferred to the Continuing Partners’ Capital Accounts (excluding the retired/deceased partner) in their new ratio. Memorandum Revaluation Account is prepared when partners want to show assets and liabilities at their original values and not at their revalued figures.
Regards
The syllabus issued by CBSE for the current academic session does not explicitly state whether Memorandum Revaluation A/c is excluded/included for March 2020 examination.Analysing the trends in the board papers of last few years, there has been no question on this topic. But still,this topic is covered in the book syllabus. So, why take a risk. So, I have explained the preparation of this account below for your understanding.
Memorandum Revaluation Account is an account that is prepared at the time of reconstitution of a partnership firm. This account is divided into two parts. The first part is same as Revaluation Account in which any decrease in assets and increase in liabilities is recorded on the debit side and increase in assets and decrease in liabilities is recorded on the credit side of the account. The profit or loss from the revaluation is transferred to the Old partners- for admission (or All Partners- for retirement and death) in their old ratio. In the second part of this account, whatever is debited in the first part is credited and in the similar manner, whatever is credited above is debited. Accordingly, if in the first part there exists a profit then naturally there will be loss in the second part and vice-versa. The profit or loss from this part is transferred to the All Partners’ Capital Accounts- for admission (including new partner) in the new ratio and in case of retirement/death it is transferred to the Continuing Partners’ Capital Accounts (excluding the retired/deceased partner) in their new ratio. Memorandum Revaluation Account is prepared when partners want to show assets and liabilities at their original values and not at their revalued figures.
Regards