Question

Consider the following data and identify the amount which will be deducted from sundry debtors in balance sheet.

Particulars	Rs.
Bad debts (from trial balance)	$1,600$
Provision for doubtful debts (old)	$2,000$
Current year's provision (new)	$800$

• A. $Rs.400$
• B. $Rs.800$
• C. $Rs.2,000$
• D. $Rs.2,400$

Answer 1

Answer: (B)

$Rs.800$

Bad debts from trial balance will be debited to Profit and Loss A/c. Provision for doubtful debts (old) will be kept as opening balance to "Provision for Doubtful Debt A/c". Current year's provision (new) will be kept as closing balance to "Provision for Doubtful Debt A/c" and this amount will be deducted from the debtors.