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Realisation Account is differ from Revaluation Account as
- a)prepared at a number of times during the life of a firm
- b)prepared at three times during the life of a firm
- c)Prepared only twice during the life of a firm
- d)Prepared only once during the life of a firm
Correct answer is option 'D'. Can you explain this answer?
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Realisation Account is differ from Revaluation Account asa)prepared at...
Realisation Account is prepared only once in the life time of the firm i.e. at the time of dissolution. Revaluation account is prepared at the time of reconstitution of partnership firm i.e. change in existing profit sharing ratio, admission of a partner, retirement of a partner, death of a partner etc.
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Realisation Account is differ from Revaluation Account asa)prepared at...
Realisation Account vs Revaluation Account
Realisation Account and Revaluation Account are both important accounts used in accounting, but they serve different purposes and are prepared at different times during the life of a firm. Let's understand the key differences between the two:
Realisation Account
- Realisation Account is prepared only once during the life of a firm.
- It is used to record the sale of assets and liabilities when a firm is being dissolved or when there is a change in the constitution of the firm.
- The main purpose of the Realisation Account is to determine the profit or loss on the realisation of assets and settlement of liabilities.
- It helps in distributing the final profits or losses among the partners of the firm.
Revaluation Account
- Revaluation Account is prepared at different times during the life of a firm, typically when there is a change in the partnership or when the firm wants to revalue its assets and liabilities.
- It is used to record any increase or decrease in the value of assets and liabilities of the firm.
- The main purpose of the Revaluation Account is to adjust the capital accounts of the partners based on the revalued amounts of assets and liabilities.
- It helps in maintaining the accuracy of the capital accounts and reflecting the true financial position of the firm.
In conclusion, while Realisation Account is prepared only once during the life of a firm to determine the final profit or loss, Revaluation Account is prepared at different times to adjust the values of assets and liabilities and to maintain the accuracy of the capital accounts.
Realisation Account and Revaluation Account are both important accounts used in accounting, but they serve different purposes and are prepared at different times during the life of a firm. Let's understand the key differences between the two:
Realisation Account
- Realisation Account is prepared only once during the life of a firm.
- It is used to record the sale of assets and liabilities when a firm is being dissolved or when there is a change in the constitution of the firm.
- The main purpose of the Realisation Account is to determine the profit or loss on the realisation of assets and settlement of liabilities.
- It helps in distributing the final profits or losses among the partners of the firm.
Revaluation Account
- Revaluation Account is prepared at different times during the life of a firm, typically when there is a change in the partnership or when the firm wants to revalue its assets and liabilities.
- It is used to record any increase or decrease in the value of assets and liabilities of the firm.
- The main purpose of the Revaluation Account is to adjust the capital accounts of the partners based on the revalued amounts of assets and liabilities.
- It helps in maintaining the accuracy of the capital accounts and reflecting the true financial position of the firm.
In conclusion, while Realisation Account is prepared only once during the life of a firm to determine the final profit or loss, Revaluation Account is prepared at different times to adjust the values of assets and liabilities and to maintain the accuracy of the capital accounts.
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Realisation Account is differ from Revaluation Account asa)prepared at a number of times during the life of a firmb)prepared at three times during the life of a firmc)Prepared only twice during the life of a firmd)Prepared only once during the life of a firmCorrect answer is option 'D'. Can you explain this answer?
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Realisation Account is differ from Revaluation Account asa)prepared at a number of times during the life of a firmb)prepared at three times during the life of a firmc)Prepared only twice during the life of a firmd)Prepared only once during the life of a firmCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Realisation Account is differ from Revaluation Account asa)prepared at a number of times during the life of a firmb)prepared at three times during the life of a firmc)Prepared only twice during the life of a firmd)Prepared only once during the life of a firmCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Realisation Account is differ from Revaluation Account asa)prepared at a number of times during the life of a firmb)prepared at three times during the life of a firmc)Prepared only twice during the life of a firmd)Prepared only once during the life of a firmCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
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