A liability for a claim included in creditors for ₹10000 is settled at ₹8000 What will happened to revaluation ac and why?j
Creditors A/C Dr. 10000
To Revaluation A/C. 2000
To Bank A/C. 8000
This is because, Creditors are liabilities for a firm and it shows credit balance. As creditors have allowed some discount, the discount received is profit and credited to revaluation a/c which is a nominal a/c.
Hope this helps!!!
To Revaluation A/C. 2000
To Bank A/C. 8000
This is because, Creditors are liabilities for a firm and it shows credit balance. As creditors have allowed some discount, the discount received is profit and credited to revaluation a/c which is a nominal a/c.
Hope this helps!!!