Which of the following are shown in Revaluation A/c? A. Unrecorded As…

Which of the following are shown in Revaluation A/c?

A. Unrecorded Asset

B. Workmen Compensation Reserve

C. Decrease in fixed Asset

D. Increase in Inventory

E. Drawings of partner

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → A, C and D only

The Revaluation Account records changes in the values of assets and liabilities, including unrecorded ones. Reserves and drawings do not pass through it.

(A) Unrecorded Asset — True. An unrecorded asset brought into the books is a gain credited to Revaluation Account.

(B) Workmen Compensation Reserve — False. It is a reserve (accumulated profit), transferred to the old partners’ capital accounts in the old ratio.

(C) Decrease in fixed Asset — True. A fall in the value of an asset is a loss debited to Revaluation Account.

(D) Increase in Inventory — True. A rise in the value of an asset is a gain credited to Revaluation Account.

(E) Drawings of partner — False. Drawings are debited to the partner’s capital or current account.

NCERT (2026-27 edition):
Revaluation of Assets and Reassessment of Liabilities – “… 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.”

NCERT (2026-27 edition):
Adjustment for Accumulated Profits and Losses – “Sometimes a firm may have accumulated profits not yet transferred to capital accounts of the partners. These are usually in the form of general reserve, reserve and/or Profit and Loss Account. The new partner is not entitled to have any share in such accumulated profits. These are distributed among the partners by transferring it to their capital current accounts in old profit sharing ratio.”