Question

State whether Revaluation Account is debited or credited to record an unrecorded asset.

Answer 1

The revaluation account is credited with the amount of the unrecorded asset at the time of admission of a partner. Unrecorded assets are those assets which do not appear in the books but are present in the business. These unrecorded assets are a gain to the firm and hence, are credited to the revaluation account.

The accounting entry is:

Cash a/c... Dr.

To Revaluation a/c