Accounting 9706 · AS & A Level · Accounting for non-current assets

Accounting for non-current assets — practice question

The data given is: Freehold premises, cost: $125000 Provision for depreciation of freehold premises: $50000 After revaluation, the premises were valued at $180000. Which journal entries are needed to record the revaluation?

  • AIncome statement: credit $105000; Freehold premises at cost account: debit $55000; Provision for depreciation: none; Revaluation reserve: debit $50000
  • BIncome statement: debit $55000; Freehold premises at cost account: debit $75000; Provision for depreciation: debit $50000; Revaluation reserve: credit $180000
  • CIncome statement: debit $75000; Freehold premises at cost account: debit $55000; Provision for depreciation: debit $50000; Revaluation reserve: credit $180000
  • DIncome statement: none; Freehold premises at cost account: debit $55000; Provision for depreciation: debit $50000; Revaluation reserve: credit $105000

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