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"Bank loan is paid off". How will you treat this adjustment? Will it appear in Revaluation a/c? If not, why?
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"Bank loan is paid off". How will you treat this adjustment? Will it a...
Adjustment for Bank Loan Paid Off
- When a bank loan is paid off, it is considered as a reduction in liabilities.
- This adjustment should be recorded in the journal entry to reflect the new status of the company's financial position.
- The journal entry for this adjustment would be:
- Debit: Bank Loan
- Credit: Cash
- This adjustment will not appear in the Revaluation account as it is not related to the revaluation of assets and liabilities.
- The revaluation account is used to record adjustments for changes in the value of assets and liabilities due to external factors such as inflation or changes in market conditions.
- The adjustment for a bank loan paid off is an internal event that does not affect the value of assets or liabilities.
- Therefore, it is not relevant to include in the revaluation account.
Community Answer
"Bank loan is paid off". How will you treat this adjustment? Will it a...
Here, asset (bank) and bank loan (liability), both are affected simultaneously by the same amount. Therefore, it should not be recorded in the Revaluation A/c. When bank loan is paid-off, Bank A/c is debited (decrease in asset) and Bank Loan A/c will be credited (decrease in liability)
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"Bank loan is paid off". How will you treat this adjustment? Will it appear in Revaluation a/c? If not, why?
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"Bank loan is paid off". How will you treat this adjustment? Will it appear in Revaluation a/c? If not, why? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about "Bank loan is paid off". How will you treat this adjustment? Will it appear in Revaluation a/c? If not, why? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for "Bank loan is paid off". How will you treat this adjustment? Will it appear in Revaluation a/c? If not, why?.
"Bank loan is paid off". How will you treat this adjustment? Will it appear in Revaluation a/c? If not, why? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about "Bank loan is paid off". How will you treat this adjustment? Will it appear in Revaluation a/c? If not, why? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for "Bank loan is paid off". How will you treat this adjustment? Will it appear in Revaluation a/c? If not, why?.
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