Question

At the time of retirement of a partner, arrange the following accounts in the correct sequence.
(A) Partners' Current A/c
(B) Revaluation A/c
(C) Balance Sheet
(D) Partners' Capital A/c
Choose the correct answer from the options given below:

• A. (A), (B), (C), (D)
• B. (B), (A), (D), (C)
• C. (C), (B), (A), (D)
• D. (C), (B), (D), (A)

Hint:

The Balance Sheet is always prepared last; the Revaluation A/c goes first.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
At retirement the adjustments are done through accounts in a fixed order. The final result is shown in the new Balance Sheet.

Step 2: Order of preparation:
First the Revaluation A/c (B) is prepared to record changes in values of assets and liabilities. Next the Partners' Current A/c (A) is adjusted for the items that belong there. Then the Partners' Capital A/c (D) is prepared, where the balances of the earlier accounts are finally moved. Last the Balance Sheet (C) is drawn up with the closing balances.

Step 3: Why the Balance Sheet is last:
The Balance Sheet is a summary of all the account balances after adjustments. It cannot be made before them. So options (3) and (4) are wrong.

Step 4: Why option (1) is wrong:
It puts the Revaluation A/c after the Current A/c. But the revaluation profit or loss must be known first, so that it can be passed on to the partners' accounts.

Step 5: Match with options:
B, A, D, C is option (2).

Final Answer:
The correct sequence is (B), (A), (D), (C). \[ \boxed{\text{(B), (A), (D), (C) (Option 2)}} \]