Which item will create an amount on the debit side of Revaluation Account?

Correct answer: Increase in provision for doubtful debts

The debit side of Revaluation Account records losses or increases in liabilities. When the provision for doubtful debts is increased, the firm recognizes an additional possible loss because a smaller amount may be collected from debtors. Therefore, the increase is debited to Revaluation Account.

A decrease in an old liability is a gain, because the firm has less obligation. An unrecorded asset found is also a gain, and an increase in an asset raises the firm’s value; these items are credited. Thus the correct choice is option C, increase in provision for doubtful debts. The key is to decide whether the adjustment reduces net assets or increases them.