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At the time of admission of a new partner, on which side of the Revaluation Account is a decrease in the value of debtors recorded?

Answer and explanation

Correct answer: Debit side

Debtors are an asset. A decrease in their value represents a decrease in assets and a loss on revaluation, so it is recorded on the debit side of the Revaluation Account. In contrast, an increase in an asset is credited to the Revaluation Account. Exam tip: decrease in an asset means debit the Revaluation Account; increase means credit it.

Related tags

Revaluation AccountDebtorsAsset DecreaseAdmission Of PartnerPartnership AccountingAsset RevaluationReconstitution Admission Of A PartnerAccountancy

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