With the help of following information calculate provisions for bad and doubtful debts
Debtors M: Rs. 3,200 Bad to be written off
Debtors N: Rs. 8,000 expeected to realise only 70%
Debtors O: Rs. 6,000 expected to realise only 60%
Debtors P: Rs. 4,000 financial condition very poor, no recovery is likely
A. Rs. 8,800
B. Rs. 12,000
C. Rs. 4,800
D. Rs. 4,000
Answer: Option A
This Question Belongs to Commerce >> Accounting
Join The Discussion
Comments ( 1 )
Related Questions on Accounting
Accounting provides information on
A. Cost and income for managers
B. Company's tax liability for a particular year
C. Financial conditions of an institutions
D. All of the above
The long term assets that have no physical existence but are rights that have value is known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Patents, Copyrights and Trademarks are
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Here we just take those types of amounts which we cannot received from debtors.
So, we take firstly, 70% of 8000 is 5600. and then we less it from 8000-5600=2400 is not receivable from Debtor N. Secondly, we take 60% of 6000 is 3600, then we less it from 6000-3600=2400 is also not receivable from Debtor O, and lastly Debtor P whole amount 4000 is not receivable.
Then we add the amount which not receivable by the above Debtors are as:
Debtor N = 2400
Debtor O = 2400
Debtor P = 4000
Here the total of above Debtors are = 8800 So the answer is right.