Question

4. If Assets are increasing but liabilities decreasing; in such a case Revaluation A/c will
show
a. Do not prepare Revaluation A/C
b. Neither Gain or Loss
C. Profit
d. Net loss​

Answer 1

The Revaluation A/c will  show Profit.

• It is a nominal account designed for the dispersal and transfer of profits and losses resulting from changes in the book value of assets and liabilities.
• The account is credited with an increase in the value of each asset and a decrease in its obligations; this is a profit.
• Nevertheless, the account is debited with a drop in the value of assets and an increase in its obligations; this is a loss.