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10% of general reserve was to be transferred to provision for doubtful debts.Will provision come under revaluation account and why?
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10% of general reserve was to be transferred to provision for doubtful...
Provision for doubtful debts is typically not recorded in the revaluation account. Instead, it is typically recorded in the profit and loss account or the balance sheet as a liability.
The revaluation account is a type of account that is used to record changes in the value of assets or liabilities due to changes in market conditions or other factors. It is typically used to reflect changes in the fair value of assets or liabilities that are held at fair value, such as investments or financial instruments.
Provision for doubtful debts, on the other hand, is a liability that is created to reflect the expected loss on a company's outstanding debts due to the risk of non-payment. It is typically based on the company's credit risk assessment and is intended to provide a buffer against potential losses on outstanding debts.
Therefore, it is not typically recorded in the revaluation account, as it is not related to changes in the value of assets or liabilities due to changes in market conditions or other factors. Instead, it is recorded in the profit and loss account or the balance sheet as a liability, to reflect the expected loss on outstanding debts.
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10% of general reserve was to be transferred to provision for doubtful...
Provision for doubtful debts and revaluation account
Provision for doubtful debts:
- Provision for doubtful debts is a reserve created to cover the possibility of losses that may arise from customers who are unable to pay their debts.
- It is created by transferring a portion of the general reserve to a separate account known as the provision for doubtful debts account.
- The amount of provision is based on an estimate of potential losses that may arise from non-payment of debts.
Revaluation account:
- Revaluation account is a nominal account that is used to record changes in the value of assets and liabilities.
- It is created when there is a change in the value of an asset or liability due to revaluation or other reasons.
Will provision for doubtful debts come under revaluation account and why?
No, provision for doubtful debts will not come under revaluation account. This is because revaluation account is used to record changes in the value of assets and liabilities, whereas provision for doubtful debts is created to cover the possibility of losses that may arise from non-payment of debts.
Conclusion:
In conclusion, provision for doubtful debts and revaluation account are two separate accounts and the provision for doubtful debts will not come under revaluation account.
Provision for doubtful debts:
- Provision for doubtful debts is a reserve created to cover the possibility of losses that may arise from customers who are unable to pay their debts.
- It is created by transferring a portion of the general reserve to a separate account known as the provision for doubtful debts account.
- The amount of provision is based on an estimate of potential losses that may arise from non-payment of debts.
Revaluation account:
- Revaluation account is a nominal account that is used to record changes in the value of assets and liabilities.
- It is created when there is a change in the value of an asset or liability due to revaluation or other reasons.
Will provision for doubtful debts come under revaluation account and why?
No, provision for doubtful debts will not come under revaluation account. This is because revaluation account is used to record changes in the value of assets and liabilities, whereas provision for doubtful debts is created to cover the possibility of losses that may arise from non-payment of debts.
Conclusion:
In conclusion, provision for doubtful debts and revaluation account are two separate accounts and the provision for doubtful debts will not come under revaluation account.
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10% of general reserve was to be transferred to provision for doubtful debts.Will provision come under revaluation account and why?
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10% of general reserve was to be transferred to provision for doubtful debts.Will provision come under revaluation account and why? for Class 9 2024 is part of Class 9 preparation. The Question and answers have been prepared according to the Class 9 exam syllabus. Information about 10% of general reserve was to be transferred to provision for doubtful debts.Will provision come under revaluation account and why? covers all topics & solutions for Class 9 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 10% of general reserve was to be transferred to provision for doubtful debts.Will provision come under revaluation account and why?.
10% of general reserve was to be transferred to provision for doubtful debts.Will provision come under revaluation account and why? for Class 9 2024 is part of Class 9 preparation. The Question and answers have been prepared according to the Class 9 exam syllabus. Information about 10% of general reserve was to be transferred to provision for doubtful debts.Will provision come under revaluation account and why? covers all topics & solutions for Class 9 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 10% of general reserve was to be transferred to provision for doubtful debts.Will provision come under revaluation account and why?.
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