Question

A's trial balance provides you the following information: Bad debts Rs.1,000. It is desired to maintain a provision for bad debts at Rs. 2,000. Amount debited to profit and loss a/c will be_________.

• A. Rs. 1,000
• B. Rs. 3,000
• C. Rs. 4,000
• D. Rs. 2,000

Answer 1

The correct option is B Rs. 3,000

Amount to be debited to P & L A/c = Bad debts + new provision

= RS-1,000 + RS-2,000

= RS-3,000.