Question

a liability of 7004 will be created against bills receivable discounted earlier but now dishonored. what will be the effect on revaluation account partners current, capital account and balance sheet?

Answer 1

A liability of Rs. 7,004 will be created against bills receivable discounted earlier but now dishonoured. ... The impact of the transaction 'A liability of Rs. 7,004 will be created against bills receivable discounted earlier but now dishonoured' will be on Revaluation A/c and Balance Sheet only.....

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Answer 2

The transaction will be dishonoured on the Revaluation A/c and Balance Sheet only.

• The amount of the transaction's effect on the liability of this amount will be properly established in relation to previously discounted bills receivable.
• However, but now it will be dishonoured on the Revaluation A/c and Balance Sheet only.

• In the case of a journal, the correct transaction will be -

1. Account for debit revaluation with Rs 7,004
2. On the Liabilities side of the new balance sheet, it is required to enter Rs 7,004 for the Liability against bills Discounted.

• Thus, the correct journal entry is -

Revaluation A/c.   Dr                               7400

To Liability against bills Discounted.     7400

( Being liability against bill discounted debited to Revaluation A/c)

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