Question

State whether the Partner's capital account is debited to record the loss of revaluation account.

Answer 1

The partner's capital account is debited to record the loss of the revaluation account. The revaluation account is credited with an increase in the assets and a decrease in the liabilities since it is a gain. It is debited with the decrease in the assets and an increase in the liabilities since it is a loss. When the debit side is greater than the credit, there is a loss on revaluation which is debited to the partner's capitals accounts in their old profit sharing ratio.

The accounting entry is:

Partner's capital a/c.... Dr.

To Loss on revaluation