Question

On admission of A, a new partner, the land and building was raised by Rs.7500. The revaluation a/c will be ___________.

• A. debited by Rs.7500
• B. credited by Rs.7500
• C. debited by Rs.750
• D. credited by Rs.750

Answer 1

The correct option is B credited by Rs.7500

Revaluation account is account which is prepared at the time of reconstitution of a firm. In this account, increase in the value of asset and decrease in the value of liability is credited and increase in the value of laibility and decrease in the value of asset is debited.

In the given case, the value of Land and Building has been increased on account of admission of the new partner.

Hence, the journal entry would be as follows:

Land & Building A/c..Dr....$Rs.7,500$

To Revaluation A/c....$Rs.7,500$