Practicing Success
Practicing Success
CUET Preparation Today
| The account which shows change in the value of assets and liabilities is knows as: |
Revaluation Account Current Account Profit and Loss Appropriation Account Profit and Loss Account |
| Revaluation Account |
| At the time of admission of a new partner, it is always desirable to ascertain whether the assets of the firm are shown in books at their current values. In case the assets are overstated or understated; these are revalued. Similarly, a reassessment of the liabilities is also done so that these are brought in the books at their correct values. At times there may also be some unrecorded assets and liabilities of the firm. These also have to be brought into the books of the firm. For this purpose, the firm has to prepare the Revaluation Account. 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. |
