Which of the following will affect the Revaluation Gain or Loss at the time of reconstitution?

A. Undervaluation of Building

B. Overvaluation of Stock

C. Valuation of Goodwill

D. Reserve appearing in Books

E. Unrecorded Assets

Choose the correct answer from the options given below :

A, B and E only

The correct answer is option (1) : A, B and E only.

A. Undervaluation of Building- Undervalue of building will increase the profit of the revaluation account.

B. Overvaluation of Stock- Overvalue of building will decrease the profit of the revaluation account.

C. Valuation of Goodwill-No effect on revaluation account.

D. Reserve appearing in Books- No effect on revaluation effect. This is distributed between partners.

E. Unrecorded Assets- It is recorded in revaluation account Which will increase the profit of the firm.