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JAMB Principles of Accounts 2006 Question 48

Question 48

Partnership Admission, Retirement and Dissolution

In converting a partnership to a company, the loss on asset revaluation is

  1. A.debited to the revaluation account
  2. B.debited to the profit and loss account
  3. C.credited to the revaluation account
  4. D.credited to the profit and loss account
Show the answer and explanation

Answer: A (debited to the revaluation account)

Explanation

A fall in an asset's value is a loss: debit the revaluation account and credit the asset. The net balance is then shared among the partners.