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Adjustments in Partner's Capital Accounts

After deducti...

Question

After deducting bad debts provision the debtors shows ___________ value.

A

Realisable

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B

Net

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C

Gross

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D

None

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Solution

The correct option is A Realisable
Provision for bad debts is the amount earmarked or set apart from out of the profits of an accounting period. The amount to be earmarked is based on a percentage of the amount due from sundry debtors. The amount of sundry debtors for this purpose is the balance left on the account after deducting bad debts.

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