Question

If there is an increase in the value of plant & machinery, we debit the account and credit the account.

• A. plant and machinery
• B. bank
• C. revaluation
• D. profit and loss

Answer 1

Answer: (A), (C)

The correct options are
A plant and machinery
C revaluation

For this purpose, the firm has to prepare the Revaluation Account. In this account:

• An increase in the assets and decrease in its liabilities is credited because it is gain,
• A decrease in the value of assets and increase in its liabilities is debited because it is a loss

If there is an increase in the value of plant & machinery, we debit the plant and machinery account and credit the revaluation account.