Question

Why Revaluation Account is debited on transfer of gain arising from revaluation of assets and reassessment of liabilities?

Answer 1

Revaluation account is debited when there is an increase in the liabilities or a decrease in the assets. It is a loss for the firm. It is credited when there is an increase in the assets and decrease in the liabilities. An increase in the assets or decrease in the liabilities is a gain for the firm. If this amount is greater than the loss faced by the firm, then the profit on such revaluation is shown by debiting the revaluation account to balance both sides of the account.