Multiple choice

Stock is appearing in the books at Rs. 36,000 and it is undervalued by 20%. How to treat it in the revaluation account?

  1. Credit revaluation account by Rs. 9,000

  2. Debit revaluation account by Rs. 9,000

  3. Rs. 6,000 to be debited to revaluation account

  4. Credit revaluation by Rs. 6,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

This is the correct answer. The correct value of stock is 36000 * 100/80 = Rs. 45,000. So, there is a profit of Rs. 9,000 and should be credited to revaluation account.

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