Revaluation Account is :-

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Nominal Account

The Revaluation Account records only gains and losses: it is credited with every increase in the value of an asset and decrease in a liability, and debited with every decrease in an asset and increase in a liability. Its balance is a profit or loss on revaluation, which is closed by transfer to the old partners' capital accounts. An account of gains and losses that is closed at once is a nominal account, like the Profit and Loss Account.

Option (1) Real Account — Incorrect. A real account is the account of an asset; the Revaluation Account does not record any asset, only the change in the value of assets and liabilities.

Option (3) Personal Account — Incorrect. A personal account is the account of a person, such as a partner's capital account; the Revaluation Account is not the account of any person.

Option (4) Capital Account — Incorrect. The capital accounts receive the balance of the Revaluation Account; the Revaluation Account itself is a separate, temporary account.

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