Multiple choice

If the revaluation reveals the overvaluation of a liability existing in the books, the entry will be to

  1. credit the liability and debit the revaluation account

  2. debit the liability and credit the revaluation account

  3. credit the liability and debit the partner capital account

  4. credit the liability and debit the profit and loss account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The liability should be debited and revaluation should be credited because it is a profit.

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