The provision for doubtful debts is reduced from ₹14,000 to ₹9,500. On which side of the Revaluation Account, and for what amount, will it be recorded?

Correct answer: ₹4,500 credit

A reduction in the provision decreases the liability and results in a gain of ₹4,500. Therefore, ₹4,500 is recorded on the credit side of the Revaluation Account: ₹14,000 − ₹9,500 = ₹4,500. ₹9,500 is the new balance, not the adjustment amount. Exam tip: When a provision related to an asset decreases, credit the difference to the Revaluation Account.