The credit balance of the Revaluation Account means a loss on revaluation of assets and liabilities.

Question

State True or False with reasons.

The credit balance of the Revaluation Account means a loss on revaluation of assets and liabilities.

Answer 1

This statement is False.

The credit balance of the Revaluation Account means profit on revaluation of assets and liabilities. Revaluation A/c is nominal A/c. On the credit side of this A/c, all incomes and gains are recorded. The credit balance means the credit amount is more than the debt amount. Hence, the credit balance of the Revaluation Account is profit on the revaluation of assets and liabilities.