Question

A trial balance contains Debtors Rs 15000, Bad Debts Rs 400 and Provision for Doubtful Debts Rs. 600. Further bad debts given in adjustments are Rs. 400. If a provision at $5\%$ is made on Debtors. P & L A/c will be debited with:

• A. Rs. 950
• B. Rs 800
• C. Rs 930
• D. Rs 1130

Answer 1

The correct option is C Rs 930

The debtors given in trial balance will be adjusted against the balance of provision of bad debts and the bad debts given as adjustment will be reduced from debtors.

Provision on debtors = (15,000 - 400) 14,600 x 5/100

= Rs-730.

Provision to be debited to P & L A/c = Rs-730 + 200 (600 - 400)

= Rs-930.