Question

Give journal entry for:
For creating provision for doubtful debts.

• A. Provision for doubtful debts A/c Dr.
  To Profit and Loss A/c
• B. Profit and Loss A/c Dr.
  To Provision for doubtful debts A/c
• C. Bad debts A/c Dr.
  To Sundry debtors A/c
• D. Profit & Loss A/c Dr.
  To Bad debts A/c

Answer 1

The correct option is B Profit and Loss A/c Dr.

To Provision for doubtful debts A/c
Provision for doubtful debt is created for the anticipated loss due to non recovery of the debtors amount. It is a charge to the profit & loss account.

Following journal entry will be passed:

Profit & Loss A/c Dr.

To Provision for doubtful debts A/c