Question

Pass journal entries for the revaluation of the following:
(i) Value of building increased by ₹ 40,000.
(ii) Value of stock decreased by ₹ 10,000.
(iii) Creditors are reduced by ₹ 5,000.

Hint:

Increase in Assets → Credit Revaluation A/c
Decrease in Assets → Debit Revaluation A/c
Decrease in Liabilities → Credit Revaluation A/c
Increase in Liabilities → Debit Revaluation A/c

Answer 1

(i) Increase in value of Building
Increase in asset is credited to Revaluation Account.
Building A/c \hspace{1.5cm} Dr. \hspace{0.5cm} ₹ 40,000
\hspace*{2.5cm} To Revaluation A/c \hspace{0.5cm} ₹ 40,000
(Being increase in value of building on revaluation)
(ii) Decrease in value of Stock
Decrease in asset is debited to Revaluation Account.
Revaluation A/c \hspace{0.5cm} Dr. \hspace{0.5cm} ₹ 10,000
\hspace*{2.5cm} To Stock A/c \hspace{1.5cm} ₹ 10,000
(Being decrease in value of stock on revaluation)
(iii) Reduction in Creditors
Decrease in liability is credited to Revaluation Account.
Creditors A/c \hspace{1.2cm} Dr. \hspace{0.5cm} ₹ 5,000
\hspace*{2.5cm} To Revaluation A/c \hspace{0.5cm} ₹ 5,000
(Being reduction in creditors on revaluation)