Question

What would be the journal entry for revaluation of an unrecorded liability?

पर्याय

• Revaluation A/c Dr To Liability A/c

• Liability A/c Dr To Revaluation A/c

• Cannot be determined.

• None of these

Answer 1

Revaluation A/c Dr To Liability A/c

Explanation:

The revaluation account is credited with unrecorded assets and debited with unrecorded liabilities. If the revaluation account ends up with a credit balance, it means there was a net gain, and if it ends up with a debit balance, it means there was a net loss. Which will be transferred to the previous partners' capital accounts at the old ratio.