Question

P's trial balance contains the following information:
Bad debts Rs.3,000
Provision for bad debts Rs.3,500
It is desired to make a provision of Rs. 4,000 at the end of the year. the amount to be debited to profit and loss a/c is_________.

• A. Rs.4,000
• B. Rs.5,000
• C. Rs. 6,500
• D. Rs. 3,500

Answer 1

Answer: (D)

Rs. 3,500

Amount to be debited to P & L A/c :-

= new provision + bad debts - old provision

= Rs-4,000 + Rs-3,000 - Rs-3,500

= Rs-3,500.