Which of the following are shown is Revaluation A/c?
A. Unrecorded Asset
B. Workmen Compensation Reserve
C. Decrease in fixed Asset
D. Increase in Inventory
E. Drawings of partner
Choose the correct answer from the options given below:
This question was previously asked in
Shift 16/06/2023 3:30 PM - 6:30 PM
Correct Answer
Detailed Explanation
In accounting, a Revaluation Account is prepared to record the changes in the value of assets and liabilities of a partnership firm when there is a change in the profit-sharing ratio among the partners, or during the admission, retirement, or death of a partner. Here's what is typically shown in a Revaluation Account:
Revaluation of Assets: Any increase or decrease in the value of tangible or intangible assets is recorded in the Revaluation Account. This includes assets like land, buildings, machinery, patents, and trademarks. The purpose is to adjust the book value of these assets to their fair market values.
Revaluation of Liabilities: Changes in the value of liabilities are also recorded. For example, if there is an increase in the amount of an outstanding loan, it will be shown in the Revaluation Account.
Gains and Losses: If the revaluation of assets results in a gain, it is credited to the Revaluation Account. Conversely, if there is a loss due to revaluation, it is debited to the account.
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