Under the Revaluation Standard, Upward Valuations of Assets Are Allocated

question 14

Multiple Choice

Under the revaluation standard, upward valuations of assets are allocated directly to a reserve (equity) account and do not increase profit, while downward revaluations are treated as an expense and reduce profit. The accounting principle underpinning this treatment is:

• A) accounting entity.
• B) prudence (conservatism).
• C) going concern.
• D) materialism.

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