Asset Revaluation

Cash shortage = ₹30,000 − ₹28,450 = ₹1,550. Since it represents a decrease in the value of an asset, the Revaluation Account is debited by ₹1,550 and the Cash Account is credited. A ₹1,550 credit would indicate an increase in an asset and is therefore incorrect. Exam tip: A decrease in an asset is debited to the Revaluation Account.

The useless part is a loss of ₹25600 and 15 percent increase on remaining ₹102400 is a gain of ₹15360. Net result is a loss of ₹10240.

The governing concept is that the obsolete portion of an asset creates a loss, while an increase in the value of the remaining usable portion creates a gain. Twenty percent of the equipment’s book value is ₹1,28,000 × 20/100 = ₹25,600, which is written off as a loss. The remaining 80% is ₹1,02,400. Its increase at 15% is ₹1,02,400 × 15/100 = ₹15,360, a revaluation gain. The net result is ₹25,600 loss − ₹15,360 gain = ₹10,240 net loss. Therefore option A is correct; the other options report only one component or combine the figures incorrectly.

The governing concept is that a provision created for an expected future repair is treated as a liability or anticipated loss arising at the time of reconstitution. Creating a provision of ₹16,000 reduces the net value of the firm and therefore produces a loss. Accordingly, Revaluation Account is debited by ₹16,000, while a provision or liability account is credited by the same amount. Option B is correct. Option A would treat the provision as a gain, which is the opposite effect. Option C records a direct reduction or change in furniture, but the facts specifically describe creation of a repair provision, not a change in furniture’s book value. Option D ignores the new obligation.

Capital brought by the new partner is not a revaluation gain or loss. Revaluation Account records changes in assets and liabilities only.

The direct answer is Option B: ₹15,000 is debited to Revaluation Account. First find the increase: new liability ₹1,25,000 minus old liability ₹1,10,000 equals ₹15,000. An increase in liability means the firm now owes more, so it is a loss. A loss is debited in Revaluation Account. Thus the entry has a debit of ₹15,000, not the full new liability amount. Option B is correct. Option A is wrong because credit represents a gain in this situation, while increased liability is a loss. Option C is wrong because ₹1,25,000 is the total new value, not the change; only the difference of ₹15,000 is recorded. Option D is wrong because the liability has changed, so there is an effect. The logical chain is: compare values, calculate the increase, classify it as loss, and debit the account. Memory cue: liability increase is a burden, and a burden is debited.

Decrease in liability by ₹22000 is a gain for the firm. When liability decreases Revaluation Account is credited.

The previously written off amount is now recoverable so the asset increases. This gain is credited to Revaluation Account.

The governing concept is comparison of the asset’s old carrying amount with its newly agreed value. The old carrying amount is not the gross figure of ₹2,00,000 because accumulated depreciation of ₹30,000 must be deducted. Thus, old net value = ₹2,00,000 − ₹30,000 = ₹1,70,000. The accepted new net value is ₹1,60,000, so the asset has fallen in value by ₹1,70,000 − ₹1,60,000 = ₹10,000. This reduction is a loss debited to Revaluation Account. Therefore option A is correct. Option C compares the gross value with the new value and ignores the old provision; options B and D confuse the provision or new value with the actual loss.

Old net value is ₹270000 and new net value is ₹300000. Therefore there is a revaluation gain of ₹30000.

Profit increases capital so it is credited to old partners capital accounts. In exams remember profit is credited and loss is debited.

Loss reduces capital so it is debited to old partners capital accounts. It is always done in the old ratio.

The loan was not a genuine liability of the firm, so removing it reduces the firm’s liabilities by ₹50,000. A decrease in liability is a gain on revaluation; therefore, the Revaluation Account is credited by ₹50,000. The new partner’s account is not debited because this adjustment relates to correcting the firm’s books before admission. Exam tip: an increase in liability is debited to Revaluation, while a decrease in liability is credited to it.

Recognising a previously unrecorded liability increases the firm's liabilities and creates a revaluation loss. Therefore, the Revaluation Account is debited by ₹62,000 and the related liability account is credited. Option A is incorrect because an unrecorded liability represents a loss, not a gain. Exam tip: For an unrecorded liability, the usual entry is Revaluation Account Dr. To Liability Account.

Decrease in copyright is ₹23000. Even when an intangible asset decreases Revaluation Account is debited.

Software value increased by ₹17000. Increase in asset is a gain and is credited to Revaluation Account.

A decrease in an asset reduces the firm’s net assets and is treated as a revaluation loss. A decrease in a liability has the opposite effect: the firm’s obligation becomes smaller, so it creates a revaluation gain. In this case, the asset loss is ₹41,000 and the liability gain is ₹28,000.

Offset the gain against the loss: \\(₹41,000-₹28,000=₹13,000\\). Because the loss is larger, the final result is a net revaluation loss of ₹13,000. Therefore option A is correct. The amounts should be compared rather than added, since they have opposite effects on the firm’s net worth.

When book values are retained the memorandum revaluation method is used. In real method the final balance sheet is prepared at new values.

In real revaluation method assets are shown at changed values. The difference goes to Revaluation Account.

The governing principle is that an unrecorded asset discovered during reconstitution must be brought into the books at its agreed value. Equipment is an asset, so its account is debited by ₹46,800 to recognize the resource owned by the firm. Because the asset was previously omitted and its discovery represents a gain to the existing business, Revaluation Account is credited with ₹46,800. The entry is Equipment Account Dr. ₹46,800; To Revaluation Account ₹46,800. Therefore option A is correct. Option B reverses the debit and credit, option C wrongly introduces a bank transaction, and option D would leave a known asset unrecorded.

The governing concept is that both the bad-debt write-off and the new doubtful-debt provision are losses charged to Revaluation Account. First remove the bad debts from total debtors: ₹1,84,000 − ₹9,000 = ₹1,75,000. The required provision is 3% of ₹1,75,000, which equals ₹5,250. The total revaluation debit is therefore ₹9,000 + ₹5,250 = ₹14,250. Hence option B is correct. Option A includes only the provision and ignores the direct bad-debt loss. Option D includes only bad debts and ignores the new provision. Option C results from applying an incorrect percentage or base rather than the balance after write-off.