if at the time of admission there is some unrecorded liability, it will be_____
1 transfer to old partner capital
2 transfer to all partner capital
3 credited to revaluation AC
4 Debited to revaluation AC
Answers
Answer:
i) Revaluation A/c Dr. 5000
To Provision for doubtful debts 5000
(Being increase in liabilities recorded in the revaluation account)
(ii) Creditore A/c Dr. 5000
To Revaluation A/c 5000
(Being increase in assets transferred to revaluation account)
(iii) Building A/c Dr. 40000
To Revaluation A/c 40000
(Being increase in assets transferred to revaluation account)
(iv) Investment A/c Dr. 15000
To Revaluation A/c 15000
(Being increase in assets transferred to revaluation account)
(v) Revaluation A/c Dr. 2000
To provision for repairs A/c 2000
(Being increase in liabilities recorded in the revaluation account)
(vi) Revaluation A/c Dr. 3000
To Creditors A/c 3000
(Being increase in liabilities recorded in the revaluation account)
(vii) Revaluation a/c.... Dr. 50000
To A's Capital a/c 25000
To B's Capital a/c 25000
(Being profit on revaluation distributed among the partners in the ratio of 1:1)
Explanation:
Answer:
The correct option is (4) Debited to revaluation AC.
Therefore, if at the time of admission there is some unrecorded liability, it will be Debited to revaluation AC.
Explanation:
- Revaluation accounts are nominal accounts created for the distribution and transfer of gains and losses resulting from changes in the profit-sharing ratio, partner admissions, retirement, and death, ans ad we know it as well as increases and decreases in the book value of assets and liabilities.
- Unrecorded assets, assets that increase in value, and liabilities that decline in value are all credited to the revaluation account.
- Debits to the Revaluation Account are made for decreases in asset value, increases in liability value, and unrecorded obligations.
- Assets that have been entirely written off but are still physically present in the business are referred to as unrecorded assets.
- Before they are auctioned off, there is no requirement that these assets be recorded in the books.
- Therefore, at the time of the firm's dissolution, these assets are promptly credited to the Realisation account.
- Liabilities that are not documented in the books of account are known as unrecorded liabilities. Unrecorded liabilities are treated as follows in accounting:
(A) When the unrecorded liability is paid off:
Realisation A/c Dr. Cash Acc.
(B) When a partner assumes the unrecorded responsibility
Realisation A/c Dr.
to Partners' Capital Account
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