Question

A Trial Balance contains the following information :

Bad debts	Rs.5,000
Discount allowed	Rs.4,000
Provision for discount on debtors	Rs.2,000
Provision for Doubtful Debts	Rs.5,000
Sundry Debtors	Rs.50,000

At the end of the year, it is desired to maintain a provision for debts at Rs. 4,000 and provision for discount on debtors at Rs.2,000. Sundry Debtors (after provision) will appear in the Balance Sheet at a figure of :

• A. Rs.44,000
• B. Rs.38,000
• C. Rs.44,700
• D. Rs.32,300

Answer 1

The correct option is A Rs.44,000

Balance of debtors after provision = Balance before provision - Provision

= 50,000 - ( 4,000 + 2,000 )

= RS-44,000.