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. It covers all kinds of revaluation like when revaluation gain/loss is given in question or when the revised value of assets or liabilities are given. The questions also cover the concepts related o preparation of revaluation account and the journal entries to transfer profit or loss to partner capital A/c. 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
After revaluation, assets and liabilities are shown in Balance Sheet at:
A
Correct Answer: Revised/new values
After revaluation entries, assets and liabilities are shown at their revised new values in Balance Sheet of reconstituted firm.
Question 2
If partners decide to continue assets at old values without revaluation:
B
Correct Answer: Adjustment entry through gaining/sacrificing partners capital A/c
If old values continue, single adjustment entry is passed: Dr. Gaining partner, Cr. Sacrificing partners for net revaluation effect.
Question 3
Provision for Doubtful Debts when created is:
A
Correct Answer: Debited to Revaluation Account
Creating/increasing Provision for Doubtful Debts is a loss (reduces asset value), so Dr. Revaluation, Cr. Provision.
Question 4
When all debtors are good and existing Provision for Doubtful Debts is to be written back:
B
Correct Answer: Dr. Provision, Cr. Revaluation
Writing back provision (no longer needed) is a gain, so Dr. Provision for Doubtful Debts, Cr. Revaluation Account.
Question 5
When creditor not likely to be paid is written back:
B
Correct Answer: Dr. Creditors, Cr. Revaluation
Writing back creditor (liability reduced) is a gain, so Dr. Creditors Account, Cr. Revaluation Account.
Question 6
Unrecorded Outstanding expenses now discovered and to be recorded:
A
Correct Answer: Dr. Revaluation, Cr. Outstanding Expenses
Outstanding expenses increase liability (loss), so Dr. Revaluation Account, Cr. Outstanding Expenses Account.
Question 7
Prepaid expenses discovered (not recorded earlier):
B
Correct Answer: Dr. Prepaid Expenses, Cr. Revaluation
Prepaid expenses are assets (gain when discovered), so Dr. Prepaid Expenses, Cr. Revaluation Account.
Question 8
When machinery book value is Rs. 60,000 and to be reduced to Rs. 45,000, the entry is:
D
Correct Answer: Dr. Revaluation 15,000, Cr. Machinery 15,000
Reduction of Rs. 15,000 is loss, so Dr. Revaluation Account, Cr. Machinery Account to reduce book value.
Question 9
Bad debts written off are recorded in Revaluation Account by:
B
Correct Answer: Debiting Revaluation Account
Bad debts are loss, so Dr. Bad Debts/Revaluation Account, Cr. Debtors. If provision exists, adjusted through it.
Question 10
unrecorded Accrued income now discovered is:
A
Correct Answer: Gain credited to Revaluation
Accrued income is asset (gain), so Dr. Accrued Income Account, Cr. Revaluation Account.
Question 11
When capitals are fixed, revaluation gain/loss is recorded in:
B
Correct Answer: Partner Current Accounts
When capitals are fixed, revaluation profit/loss is transferred to Partners Current Accounts in old ratio, not Capital Accounts.
Question 12
Expenses on revaluation paid by old partner is:
B
Correct Answer: Debited to Revaluation Account
Revaluation expenses are loss, so Dr. Revaluation Account (shared by old partners), Cr. Bank/Partner who paid.
Question 13
When stock is undervalued by 10%, correct treatment is:
A
Correct Answer: Increase stock value by 10%
Undervalued means shown less than actual, so increase by 10% (gain): Dr. Stock, Cr. Revaluation Account.
Question 14
A debtor written off as bad debt earlier now pays, this is:
C
Correct Answer: Gain to Revaluation
Recovery of written off debt is gain: Dr. Bank/Cash, Cr. Revaluation Account (or Bad Debts Recovered transferred to Revaluation).
Question 15
Revaluation Account is closed by transferring balance to:
D
Correct Answer: Old Partners Capital/Current Accounts in old ratio
Revaluation Account balance (profit or loss) is closed by transferring to Old Partners Capital/Current Accounts in old profit-sharing ratio.
