This MCQ Test on the Revaluation of assets and liabilities on admission of a new partner has 15 practice questions. it covers the accounting treatment for all kinds of revaluation like increase in assets, decrease in assets, increase in liabilities and decrease in liabilities , etc. It covers both the methods of revaluation where assets and liabilities appear in the new balance sheet at revised values and when assets and liabilities continues to appear in the new balance sheet at old values. The test covers conceptual questions for all above aspects. This MCQ test suits well for conceptual clarity for your board exams
CBSE class 12 accountancy MCQ questions
The below MCQ test is designed as per the latest syllabus prescribed by CBSE board. With the rise in weightage of MCQ questions, the practice of MCQ questions becomes very important. The quiz is equally useful for students of CUET exams.
How to attempt the quiz
One by one go through the below questions and select the right option. Do all the questions and in the end press submit. Instantly you will get your score and the explanation against each question. Go through your mistakes and reattempt the quiz any number of times as needed.
MCQ Quiz - Practice Questions
MCQ Quiz
Question 1
Revaluation Account is prepared to record:
A
Correct Answer: Gain or loss on revaluation of assets and liabilities
Revaluation Account records both gain (profit) and loss from revaluation of assets and reassessment of liabilities on admission.
Question 2
Increase in value of assets is recorded by:
C
Correct Answer: Dr. Asset A/c, Cr. Revaluation A/c
When asset value increases (appreciation), Asset Account is debited and Revaluation Account is credited as it is a gain.
Question 3
Decrease in value of assets is recorded by:
A
Correct Answer: Dr. Revaluation A/c, Cr. Asset A/c
When asset value decreases (depreciation), Revaluation Account is debited (loss) and Asset Account is credited to reduce its value.
Question 4
Increase in liabilities is recorded by:
D
Correct Answer: Dr. Revaluation A/c, Cr. Liability A/c
Increase in liability is a loss, so Revaluation Account is debited and Liability Account is credited to increase liability.
Question 5
Decrease in liabilities is recorded by:
C
Correct Answer: Dr. Liability A/c, Cr. Revaluation A/c
Decrease in liability is a gain, so Liability Account is debited (to decrease) and Revaluation Account is credited.
Question 6
Unrecorded assets discovered are recorded by:
B
Correct Answer: Dr. Asset A/c, Cr. Revaluation A/c
Unrecorded assets are gain, so Asset Account is debited (to record) and Revaluation Account is credited.
Question 7
Unrecorded liabilities discovered are recorded by:
B
Correct Answer: Dr. Revaluation A/c, Cr. Liability A/c
Unrecorded liabilities are loss, so Revaluation Account is debited and Liability Account is credited to record liability.
Question 8
Profit on Revaluation Account is transferred to:
C
Correct Answer: Old partners in old ratio
Profit/gain on revaluation belongs to old partners, so credited to their Capital/Current Accounts in old profit-sharing ratio.
Question 9
Loss on Revaluation Account is transferred to:
B
Correct Answer: Old partners in old ratio
Loss on revaluation is borne by old partners, so debited to their Capital/Current Accounts in old profit-sharing ratio.
Question 10
Revaluation Account is also known as:
B
Correct Answer: Profit and Loss Adjustment Account
Revaluation Account is also called Profit and Loss Adjustment Account as it adjusts profit/loss due to revaluation.
Question 11
If credit side of Revaluation Account exceeds debit side, it indicates:
D
Correct Answer: Gain/Profit on revaluation
Credit side greater than debit side means gains exceed losses, resulting in profit on revaluation credited to old partners.
Question 12
If debit side of Revaluation Account exceeds credit side, it indicates:
A
Correct Answer: Loss on revaluation
Debit side greater than credit side means losses exceed gains, resulting in loss on revaluation debited to old partners.
Question 13
Purpose of preparing Revaluation Account is to ensure:
B
Correct Answer: Neither new nor old partners are at advantage or disadvantage
Revaluation ensures assets/liabilities are at fair value so new partner is neither advantaged nor disadvantaged.
Question 14
When machinery is appreciated by 20%, the entry is:
A
Correct Answer: Dr. Machinery, Cr. Revaluation for appreciation amount
Appreciation is increase in value (gain), so Dr. Machinery to increase value, Cr. Revaluation Account.
Question 15
When stock is overvalued in books, the entry on revaluation is:
B
Correct Answer: Dr. Revaluation, Cr. Stock
Overvaluation means stock needs reduction (loss), so Dr. Revaluation (loss), Cr. Stock Account to reduce value.
