Question

what means revoluation account? why is it prepared? how it is perpared? what journal entries passed regarding revoluation account?​

Answer 1

Answer:

For this purpose, the firm has to prepare the Revaluation Account. In this account:

An increase in the assets and decrease in its liabilities is credited because it is gain,

A decrease in the value of assets and increase in its liabilities is debited because it is a loss,

Unrecorded assets are credited, and

Unrecorded liabilities are debited.

Answer 2

Answer:

Before we introduce a new partner to the partnership firm, we must ensure all the assets and liabilities are valued correctly. So just prior to introducing a new partner revaluation account is made and subsequent adjustments are made in books of accounts. Let us take a look.