Question

Balamony, a Plus Two student, prepared the following journal entries in connection with the reconstitution of partnership firm. 

(i) For increase in the value of assets. Revaluation Account Dr. Asset Account 

(ii) For decrease in the value of liability Liability Account Dr. Revaluation Account 

(iii) For recording unrecorded asset Partner’s Capital Account Dr. Revaluation account 

(iv) For transferring loss on revaluation on Partner’s Capital account. Cash Account Dr. Old Partner’s Capital Account 

After evaluating the above journal entries, make necessary corrections and rewrite them.

Answer 1

a. Asset A/c Dr 

    To Revaluation A/c

b. Liability A/c Dr 

     To Revaluaton A/c 

c. Asset A/c Dr 

      To Revaluaton A/c 

d. Old Partner’s Capital A/c Dr 

           To Revaluaton A/c