Where there is an asset revaluation decrement that does not reverse a previous increment, the amount is debited to:
A) an expense account.
B) retained profits.
C) revaluation surplus.
D) share capital.

Question

Quizplus · Accepted Answer

If there is an asset revaluation decrement that does not reverse a previous increment, it means that the value of the asset has decreased below its previously recorded value. In this scenario, the decrease is recognized as an expense and is debited to an expense account, reducing the company's profits. Revaluation surplus is used to record the amount by which assets have been revalued higher. Share capital is the portion of a company's equity that represents the funds contributed by shareholders. Therefore, the correct option is A) an expense account.

Where There Is an Asset Revaluation Decrement That Does Not