Question

Balance of revaluation a/c in case of fixed capitals, is transferred to: a. partners capital a/c b. partners current a/c c. P&L a/c d. realisation a/c

Answer 1

Answer:

B. partners capital a/c

Answer 2

The correct answer to this question is option b. partners current a/c.

Explanation:

• A revaluation a/c is opened for the reason of re-evaluating assets and liabilities.

• This account is credited with an increase in the value of assets and liabilities and debited with all decrease in the value of assets and an increase in liabilities.

• The difference between the two sides is the re-evaluation of profit or loss.  

• This profit and loss are transferred to current capital accounts of old partners in the old profit-sharing ratio.