The basic accounting entry for a revaluation decrease of a non-depreciable asset that is not a reversal of an original increase is which of the following?
A) Debit expense on revaluation of asset; credit asset
B) Debit asset; credit expense on the revaluation of asset
C) Debit revaluation surplus reserve; credit asset
D) Debit asset; credit revaluation surplus reserve

Question

Quizplus · Accepted Answer

When a non-depreciable asset undergoes a revaluation decrease that is not a reversal of an original increase, the decrease is recognized in profit or loss. Therefore, the correct entry is to debit an expense account related to the revaluation decrease and credit the asset account to reflect the decrease in its carrying amount.

The Basic Accounting Entry for a Revaluation Decrease of a Non-Depreciable