Tully Limited Had an Existing Revaluation Surplus in Respect to an Item

question 26

Multiple Choice

Tully Limited had an existing revaluation surplus in respect to an item of plant that has now been derecognised. The appropriate journal entry to transfer the surplus to retained earnings would include:

• A) CR Retained earnings.
• B) CR Asset revaluation surplus.
• C) DR Gain on revaluation - OCI.
• D) DR Retained earnings.

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Definitions:

Current Ratio

A financial ratio indicating how well a company can cover its short-term debts with assets that can be quickly converted into cash within a year.

Decimal Place

The position of a number to the right of the decimal point, used to represent fractions of a whole in decimal notation.

Horizontal Analysis

A financial analysis technique that compares historical financial data over a series of reporting periods to identify trends and growth patterns.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.