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Accountancy- final statements with adjustments
Debtors(including X for dishonoured bill of Rs 1000 ) written in debit side of trial balance and the amount of debtor is 30000 and in adjustment- half the amount of X's bill is irrecoverable. create a provision on debtors of 5%.
Replies (4)
Quick Summary
5% bad debt should be created on 30000 rupees and half dishonoured bill shall be adjusted
In the answer, 1000 is subtracted from 30000 and provision is created on the balance. that's what I couldn't figure out, like the reason.
{ it's given inside the trial balance so maybe something to do with that}
{ it's given inside the trial balance so maybe something to do with that}
Yes on balance bad debt should be created but the dishonoured bill should be deducted 1000 rupees because provisions should be created on whole balance
A dishonoured bill is completely bad debt and hence to be written off completely.
And provision is to be calculated on balance amount i.e. Rs. 29000
And provision is to be calculated on balance amount i.e. Rs. 29000
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