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State whether the following statements are True or False with reasons:

R.D.D. is created on Creditors.

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This statement is Raise.

R.D.D. stands for Reserve for Doubtful Debts. It is created on the value of debtors. Such provision is made against profit and loss accounts. In the future, if the loss is incurred on account of bad debts, such an amount is used to run the business.

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