Question

4) Debtors amount is 20,000. Write
off rs 200 as bad debts and provide
5% reserve for doubtful debts on
sundry debtors and 2% reserve for
discount on Debtors. Find out
R.D.D. on debtors.​

Answer 1

Answer:

Some of the typical items which find a place in the profit and loss account of a firm are depreciation, bad debts and provisions. Enlisting these items on the debit side of the account is indicative of creating a charge on the profits of the firm for that period. If these items are not accounted for in the revenue statement for a period, it would hamper the true and fair view of the accounts. Let us study these concepts in detail.

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