At the time of dissolution of partnership firm, Revaluation account is prepared or not.?
Hello Archana,
Yes, at the time of dissolution of a partnership firm , a Revaluation Account (also called Profit & Loss Adjustment Account ) is not prepared .
Instead, a Realisation Account is prepared to record:
- Sale of assets
- Payment of liabilities
- Distribution of any profit or loss on dissolution
A
Revaluation Account
is only prepared at the time of
reconstitution
(admission, retirement, or change in profit-sharing ratio), not at the time of
dissolution
.
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Hello,
At the time of the dissolution of a partnership firm, a Revaluation Account is not prepared . Instead, a Realisation Account is prepared to record the sale of assets, payment of liabilities, and distribution of remaining funds among partners.
Revaluation Account is only prepared when there is a reconstitution of the firm (like admission, retirement, or change in profit-sharing ratio), not during dissolution.
Hope it helps !
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