Question

The trial balance of a trader on 31 Dec 2016 shows sundry debtors as ₹50000
Adjustments:
(a) Write off 1,000 as bad debts
(b) Provide 5% for doubtful debts
(c) Provide 2% for discount on debtors
Show how these items will appear in the profit and loss A/cand balance sheet of the trader.
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Answer 1

Answer:Yesu

Explanation:

Receivables account 49000₹ - balance sheet assets

Discount allowed 1000₹ - profit and loss expense

To debtors account 50000₹ - sales account profit and loss

(Credit sales and discount allowed)

Bad debts written off 1000₹ - expense profit and loss

To Accounts receivable 1000₹ - balance sheet asset

Bad debts 2500₹ Loss in profit and loss

Provision for bad debts 2500₹ liabilities