Explain the Revaluation Account

A revaluation account is an account that records an increase or decrease in the value of the assets and liabilities at the time of change in profit sharing ratio, admission of a partner, or retirement and death of a partner. It is a nominal account prepared to find out the profit or loss due to a change in the value of assets and liabilities. The balance of the revaluation account is transferred to the partner's capital account in their old profit sharing ratio.

Final Answer: A revaluation account is prepared at the time of change in profit sharing ratio, admission of a partner, or retirement and death of a partner to record the changes in the value of assets and liabilities.