Question

The Trial Balance of Manish gives the following information :

It is decided to create a Provision for Doubtful Debts @ 10% on debtors and a Provision for Discount @ 2% on debtors. Show how the adjustment will appear in the Final Accounts.

Answer 1

Correct Answer - Profit and Loss Account; Bad Debts - Rs 2,500; Discount - Rs 4,500 ; Provision for Doubtful Debts - Rs 25,000; Provision for Discount - Rs 4,500.