Accounting Multiple Choice Question – 28 November 2021

The following information is extracted from the books of a company.

• Freehold premises at cost – £150,000
• Provision for depreciation of freehold premises – £100,000
• The premises are revalued at – £300,000.

Which entries are required in the company’s books to record the revaluation?

Select ONE answer:

1. Profit and Loss Account debit £0 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £250,000
2. Profit and Loss Account debit £100,000 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £250,000
3. Profit and Loss Account debit £100,000 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £300,000
4. Profit and Loss Account debit £0 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £300,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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