Post Utme Madonna University 2018 Accounting Question 11

Practice objective / multiple choice question 11 from the 2018 Post Utme Madonna University Accounting examination.

Post Utme Madonna University 2018 Accounting Objective / Multiple Choice
Question 11 POST_UTME_MADONNA_UNIVERSITY • 2018 • ACCOUNTING • objective

A company's accounting policy requires that all assets be recorded at their historical cost. However, the company has a policy of revaluing its property, plant, and equipment (PPE) every five years. If the company revalues its PPE at the end of the current year, which of the following is the correct accounting treatment?

Answer Options

A. Recognize the revaluation gain as income in the current year.
Correct Answer B. Recognize the revaluation gain as a capital reserve.
C. Recognize the revaluation gain as a revenue reserve.
D. Recognize the revaluation gain as a decrease in retained earnings.
Correct Answer
B
Correct Option:
Recognize the revaluation gain as a capital reserve.

About This Question

This is Post Utme Madonna University 2018 Accounting Question 11. It is one of the objective questions from the 2018 Post Utme Madonna University Accounting examination.

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