Question

Create reserve for Discount on Debtors @ 3%. entry in final account​

Answer 1

Answer:

Therefore, before making the Provision for Discount, the amount of Bad and Doubtful Debtors must first be estimated and deducted from the amount of Debtors as per the ledger on the balance of Debtors, i.e. on the good debtors only, the Provision for Discount on Debtors must be created.