Question

17. Give one transaction for each of the following that will:
a. Increase an asset and Increase in liability
b. Decrease in asset and decrease in liability
c. Decrease an asset and decrease capital
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Answer 1

a. assets a/c -------------     dr.

        to revaluation a/c

(being value of assets increased)

revaluation a/c ---------------- dr.

        to liability a/c

(being value of liability increased)

b. revaluation a/c ------dr.

        to assets a/c

(being value of assets decreased)

liability a/c-----------------dr.

         to revaluation a/c

(being value of liability decreased)

c. revaluation a/c ---------------- dr.

          to assets a/c

(being value of assets decreased)

no entry for decrease in capital