Assertion: A revaluation account is prepared at the time of dissolution of a partnership. Reason: A revaluation account is prepared to determine the net gain/loss on realisation of assets and settlement of liabilities. Which one of the following is correct?

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KollegeApply · Accepted Answer

Assertion is true but Reason is false. Explanation: A revaluation account is prepared at the time of dissolution of a partnership to revalue assets and liabilities before their actual realisation. It helps to adjust the profit or loss arising due to a change in asset values, not to determine net gain/loss on realisation or settlement of liabilities. The actual gain or loss on realisation is recorded in the realisation account, not the revaluation account.

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