Multiple choice

The debtors and provision for doubtful debts are appearing in the balance sheet at Rs. 2, 00,000 and Rs. 18,000 respectively. The firm decided to maintain provision in the books at 5% of debtors. How can it be shown in revaluation account?

  1. Rs. 8,000 will be credited to revaluation account.

  2. Rs. 8,000 will be debited to revaluation account.

  3. Rs. 10,000 will be debited to revaluation account.

  4. Rs. 10,000 will be credited.
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A Correct answer
Explanation

It is the correct answer. The doubtful debts are to be shown as Rs. 10,000 but Rs. 18,000 are already appearing. So, Rs. 8,000 will be credited.

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