Accounting · Balance Sheet Equation
When a company performs a revaluation of its freehold land, increasing its recorded value from historical cost to current market value, how is this reflected in the fundamental accounting equation?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Total assets remain unchanged but the composition of liabilities changes.
- 2Total assets increase and a Revaluation Reserve is created within Equity.✓
- 3Total assets increase and total equity increases through the Profit and Loss account.
- 4Total assets increase and total liabilities increase.
Correct answer
Total assets increase and a Revaluation Reserve is created within Equity.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Balance Sheet Equation MCQs →Want more practice questions on Balance Sheet Equation?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Balance Sheet Equation