Match List-I with List-II related to accounting treatment of Revaluat…

Match List-I with List-II related to accounting treatment of Revaluation of Assets and Reassessment of Liabilities.

List-I

(A) Revaluation account is credited with

(B) Unrecorded assets are credited

(D) Gain on revaluation

List-II

(I) To the revaluation account

(II) Increase in value of asset

(III) Is credited to old partners Capital A/c in old ratio

(IV) If liability increases

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A) - (II), (B) - (I), (C) - (IV), (D) - (III)

The Revaluation Account collects every gain and loss from bringing assets and liabilities to their correct values. A gain is credited to it and a loss debited, and its balance goes to the old partners.

(A) Revaluation account is credited with — this matches (II) Increase in value of asset. A rise in an asset's value is a gain to the old partners, so it is a credit to the Revaluation Account.

(B) Unrecorded assets are credited — this matches (I) To the revaluation account. An asset not shown in the books is brought in at its value; it is a gain, so the Revaluation Account is credited.

(C) Revaluation account is debited — this matches (IV) If liability increases. A rise in a liability means the firm owes more, which is a loss, so it is a debit to the Revaluation Account.

(D) Gain on revaluation — this matches (III) Is credited to old partners Capital A/c in old ratio. The gain arose while the old partners ran the firm, so it is theirs and is shared in the old ratio.

NCERT (2026-27 edition):
Revaluation of Assets and Reassessment of Liabilities – “… The gain or loss on revaluation of each asset and liability is transferred to this account and finally its balance is transferred to the capital accounts of the old partners in their old profit sharing ratio. In other words, the revaluation account is credited with increase in the value of each asset and decrease in its liabilities because it is a gain and is debited with decrease in the value of assets and increase in its liabilities is debited to revaluation account because it is a loss. Similarly unrecorded assets are credited and unrecorded liabilities are debited to the revaluation account.”