Multiple choice

From the following information, find the amount to be debited to Profit & Loss Account for the period ending 31-03-2014. Provision for doubtful debts - Rs. 800 (on 01-04-2013) Debtors on 31-03-2014 - Rs. 40,000 Bad debts - Rs. 2,000 Bad debts are to be written off and provision for doubtful debts is to be created at the rate of 5% on debtors.

  1. Rs. 3,100

  2. Rs. 4,000

  3. Rs. 3,200

  4. Rs. 3,900
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A Correct answer
Explanation

Provision for bad debts a/c:   ||||| |---|---|---|---| |Particulars|Debit|Particulars|Credit| |To Bad debts|2,000|Balance b/d|800| | | |By P & l (b/f)|3100| |To balance c/d|1900| | |

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