give me a revaluation account sums
Answers
Explanation:
Revaluation Account
Revaluation account or profit and loss adjustment account are the same.
We need to bring the value of assets and liabilities to their current values otherwise the incoming partner may have an advantage because of the change in values.
Credit the increase in the value of assets or decrease in the number of liabilities to revaluation account, being profit.
Debit the decrease in value of assets or increase in the number of liabilities to revaluation account, being a loss.
The difference between the two sides of the revaluation account is either profit or loss.
If the credit side is more than debit side there is profit and if the debit side is more than the credit side there is a loss.
Transfer the Profit or loss of revaluation account to the partners capital accounts (old partners account) in their old profit sharing ratio.
