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Sir can you explain why that underlined entry has been credited to revaluation account

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siva chaitanya

siva chaitanya

CA Foundation

1K+

17-Mar-21 09:59

19

Answers (6)

Best Answer

Sir can you please explain this question

There is no increase in liability, there is a liability that exists under trade payables which should not have been there so we have to deduct it in order to have correct trade payables. Hence, the entry Trade payable a/c Dr... To Revaluation a/c


ruchi lahoti

ruchi lahoti

Moderator

17-Mar-21 11:47

It is clearly mentioned that trade payable which is not to be paid of but should be included so we Have to increase the value of liability for increasing the value of liability we have to credit to revaluation account


sai t

sai t

CA Foundation

295

17-Mar-21 10:47

But when there is an increase the liability revaluation account should be debited

Sir can you please explain this question


siva chaitanya

siva chaitanya

CA Foundation

1K+

17-Mar-21 11:32

But when there is an increase the liability revaluation account should be debited

no it should be credited because liability have credit balance


sai t

sai t

CA Foundation

295

17-Mar-21 12:09

no it should be credited because liability have credit balance

So in the given question trade payable already contains 1,400 init so it should be deducted (Decreasing in value of liability) it should be debited and revaluation account should be credited Sorry I was busy with some other work and didn't see the question properly


sai t

sai t

CA Foundation

295

17-Mar-21 12:15

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