Question

F's trial balance contains the following information:
Discount received Rs.1,200
Provision for discount on creditors Rs.1,800
It is desired to maintain a provision for discount on creditors at Rs. 1,600
The amount to be credited to profit and loss a/c is________.

• A. Rs.1,000
• B. Rs.1,400
• C. Rs.200
• D. Rs.2,200

Answer 1

Answer: (A)

Rs.1,000

P & L A/c to be credited = New provision + Discount received - old provision

= Rs-1,600 + Rs-1,200 - Rs-1,800

= Rs-1,000 to be credited.