Multiple choice

From the following details, find out the amount to be debited to Profit and Loss Account as provision for bad & doubtful debts during 2012-13:

Debtors Rs. 30,000 as on 31.03.2013; Bad debt during the year Rs. 1,500; Provision for bad debts as on 01.04.2012 Rs. 2,000; Provision for doubtful debts to be kept at 5% of total debtors.

  1. Rs. 1,500

  2. Rs. 1,000

  3. Rs. 3,000

  4. Rs. 2,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

There are bad debts of Rs. 1,500 which are to be added by new provision of Rs. 1,500 (30,000 x 5%). Then old provision of Rs. 2,000 is subtracted. Thus, 1,500 + 1,500 - 2,000 = Rs. 1,000.

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