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Sundry Debtors on 31st March, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:
- a)Rs.1,045
- b)Rs.2,750
- c)Rs.1,100
- d)Rs.2,760
Correct answer is option 'A'. Can you explain this answer?
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Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are...
Calculation of Provision for Doubtful Debts
- Sundry Debtors on 31st March, 2006 = Rs.55,200
- Bad debts = Rs.200
- Provision for doubtful debts @ 5% = Rs.2,760 (55,200 * 5%)
Calculation of Provision for Discount
- Sundry Debtors on 31st March, 2006 = Rs.55,200
- Provision for discount @ 2% = Rs.1,104 (55,200 * 2%)
Therefore, the amount of provision of discount in debtors will be Rs.1,045 (after rounding off).
Explanation:
- Sundry Debtors are the customers who owe money to the business for goods or services provided on credit.
- Bad debts are the debts that are not expected to be recovered and are written off as an expense.
- Provision for doubtful debts is made to account for the possibility that some of the debtors may not pay their dues in full or at all. It is a contra asset account that reduces the value of the debtors in the balance sheet.
- Provision for discount is made to account for the discounts that may be given to the debtors for early payment or other reasons. It is also a contra asset account that reduces the value of the debtors in the balance sheet.
- The provision for doubtful debts is calculated as a percentage of the total debtors based on past experience or other factors.
- The provision for discount is calculated as a percentage of the total debtors based on the expected or actual discounts given to the debtors.
- The total provision for doubtful debts and provision for discount is subtracted from the total debtors to arrive at the net realizable value of the debtors.
- Sundry Debtors on 31st March, 2006 = Rs.55,200
- Bad debts = Rs.200
- Provision for doubtful debts @ 5% = Rs.2,760 (55,200 * 5%)
Calculation of Provision for Discount
- Sundry Debtors on 31st March, 2006 = Rs.55,200
- Provision for discount @ 2% = Rs.1,104 (55,200 * 2%)
Therefore, the amount of provision of discount in debtors will be Rs.1,045 (after rounding off).
Explanation:
- Sundry Debtors are the customers who owe money to the business for goods or services provided on credit.
- Bad debts are the debts that are not expected to be recovered and are written off as an expense.
- Provision for doubtful debts is made to account for the possibility that some of the debtors may not pay their dues in full or at all. It is a contra asset account that reduces the value of the debtors in the balance sheet.
- Provision for discount is made to account for the discounts that may be given to the debtors for early payment or other reasons. It is also a contra asset account that reduces the value of the debtors in the balance sheet.
- The provision for doubtful debts is calculated as a percentage of the total debtors based on past experience or other factors.
- The provision for discount is calculated as a percentage of the total debtors based on the expected or actual discounts given to the debtors.
- The total provision for doubtful debts and provision for discount is subtracted from the total debtors to arrive at the net realizable value of the debtors.
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Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are...
Debtors=55200-200=55000. Provision for PBDD=55000×5%=2750. Debtors=55000-2750=52250 Discount =2%of52250=1045
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Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer?
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Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer?.
Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer?.
Solutions for Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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ample number of questions to practice Sundry Debtors on 31stMarch, 2006 are Rs.55,200. Further Bad debts are Rs.200:Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:a)Rs.1,045b)Rs.2,750c)Rs.1,100d)Rs.2,760Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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