On which side of old partners' accounts is revaluation loss recorded?

Correct answer: Debit side

Revaluation profit or loss is transferred to the old partners because the revaluation belongs to the period before the new profit-sharing arrangement. A revaluation loss means that the value of assets has decreased, liabilities have increased, or both. This loss reduces the partners’ capital. In personal capital accounts, a reduction is recorded on the debit side, and the loss is distributed among the old partners in their old profit-sharing ratio.

The relevant treatment is: Old Partners’ Capital Accounts Dr. to Revaluation Account, when the revaluation account has a loss balance. Thus, the loss is written on the debit side of the old partners’ accounts, making option B correct. It is not recorded on the bank, sales, or any special “bank side,” because no cash transaction is necessary for a mere change in asset or liability values. The supplied explanation correctly connects loss with a reduction in capital.