accounting in revaluation a/c

personal investment of A be treated as firms investment rs4300. why it shouldnt be accounted in reval a/c.

asked Mar 26, 2015 in Partnership-Admission by deepz (143 points) 594 views

1 Answer

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answered Mar 26, 2015 by jbsclasses (3,971 points)

 

THOUGH BY JOURNALISING I CAN MAKE OUT THERES NO REVAL A/C BUT FROM A THEORETICAL POINT I AM NOT ABLE TO MAKE OUT WHY IT SHOULDNT COME AS FOR EX. IF BUILDING APPRECIATES IT WILL BE CRITED IN REVAL A/C (COZ ITS PROFIT) BUT WHEN IN THE ABOVE TRANSACTION THERE TOO IS AN INCREASES IN ASSET SO IT SHOULD COME.

Deer Deep, after reading the above question, I fully agree with you.  The language of the question 'PERSONAL INVESTMENTS OF A WORTH RS.4300 BE TREATED AS FIRM'S INVESTMENTS'.  From the language it seems as if the investments which are in the name of A actually belong to firm.  In that case it should be routed through Revaluation A/c.  But in this question they have treated this as his additional income.  I would like to reassure you that conceptually your thinking is right and your understanding of language is also right.

Best of Luck for your exam on 6th April, 2014.

thank u sir.smiley

any suggestions.

Dear Deep, we have been discussing so many questions throughout the year, your understanding of the subject is good.  My suggestion is just be calm, do some sample papers in TEST conditions.   I am sure you will do very well in exams, so don't allow tension to come near you.
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