Question

Surplus on revaluation should be treated as_________
a. other income
b. capital reserve
c. statutory reserve
d. revenue reserve​

Answer 1

Answer:

A revaluation surplus is an equity account in which is stored any upward changes in the value of capital assets. If a revalued asset is subsequently dispositioned out of a business, any remaining revaluation surplus is credited to the retained earnings account of the entity.

Answer 2

Surplus on revaluation of assets and liabilities is considered as capital reserve.

Revaluation alludes to an adjustment of the value of assets and liabilities. Any increment in the value of the asset is debited in the revaluation account and any lessening in the value of the resource is credited in the revaluation account. Any increment in the value of the liability is credited to the revaluation account and any reduction in the value of the responsibility is debited to the revaluation account. The capital reserve is displayed on the liability side under the heading reserve and surplus.