Question

What is nature of Revaluation Account ?

Answer 1

The nature of Revaluation Account is that it is opened to record the revaluation of assets and liabilities.The profit or loss arising because of evaluation is transfered to old partners capital account in their old profit sharing ratio.

Answer 2

Complete question:

What is the nature of the Revaluation account?

a. Nominal account

b. Personal account

c. Real account

d. Asset account

a. Nominal account is the nature of the Revaluation account.

Revaluation account:

• Simply put, revaluation means "determining the value of assets and liabilities again."
• A revaluation account is created either when a partner retires or when a partner is admitted.
• All assets and liabilities have been revalued, and the difference is debited or credited towards the Revaluation Account.
• The Revaluation Account is a Nominal Account.
• If the company's liabilities increase while its assets decrease, the difference must be debited to the revaluation account as a loss.
• Whereas if the value of assets increases while the value of liabilities decreases, the difference is credited towards the revaluation account as a profit for the firm.