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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
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B
Rs. 3,000
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C
Rs. 4,000
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D
Rs. 2,000
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Solution

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.

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