Revaluation account Flashcards
1
Q
What is revaluation?
A
It is the increase or decrease in the value of non-current assets and current assets.
2
Q
What is the double entry for an increase in the value of an asset?
A
Debited to the assets account (don’t need to show)
Credited to revaluation account (asset being reduced)
3
Q
What is the double entry for a decrease in the value of an asset?
A
Credited to asset account (don’t show)
Debited to revaluation account (asset being increased)
4
Q
On what ratio is the balance on the revaluation transferred to the partners account?
A
In old profit sharing ratio.
5
Q
What must the closing balance on the revaluation account equal?
A
Zero
