Write three differences between Realisation Account and Revaluation Account.

Question

The following are three differences between a realization account and a revaluation account in very short form:BasisReal...

Accepted Answer

The following are three differences between a realization account and a revaluation account in very short form:BasisReal...

Basis	Realization A/c	Revaluation A/c
Purpose	A realization account is used to track the sale of goods or assets and to record the resulting gain or loss.	A revaluation account is used to adjust the value of an asset to reflect its current market value.
Frequency	A realization account is typically prepared and updated on an ongoing basis as goods or assets are sold.	A revaluation account is typically prepared periodically, such as annually, to reflect changes in the value of the assets being revalued.
Impact on financial statements	A realization account is used to record gains or losses on the sale of goods or assets, which can impact the profitability of a company.	A revaluation account is used to adjust the value of an asset on the balance sheet, which can impact the overall net worth of a company.