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Debtors 90000
-provision 5000
adjustment:
1. bad debts 5000
2. create 20% provision on debtors?
-provision 5000
adjustment:
1. bad debts 5000
2. create 20% provision on debtors?
Most Upvoted Answer
Debtors 90000 -provision 5000 adjustment: 1. bad debts 5000 2. create ...
Adjustment for Debtors
Bad Debts Adjustment:
- Bad debts of 5000 need to be adjusted against the debtors of 90000.
- This adjustment is made to reflect the true value of the debtors in the books of accounts.
Creation of Provision:
- A provision of 20% needs to be created on the remaining debtors after deducting the bad debts.
- This provision is made to account for potential losses due to non-payment of debts in the future.
Explanation:
- After adjusting the bad debts of 5000, the remaining debtors amount to 85000.
- A provision of 20% on 85000 amounts to 17000.
- This provision helps in anticipating and preparing for any future losses that may arise from non-payment of debts by the debtors.
- By creating this provision, the company is being conservative in its approach towards accounting for potential losses.
Conclusion:
- By making the necessary adjustments for bad debts and creating a provision for potential losses, the company ensures that its financial statements reflect a true and fair view of its financial position.
Bad Debts Adjustment:
- Bad debts of 5000 need to be adjusted against the debtors of 90000.
- This adjustment is made to reflect the true value of the debtors in the books of accounts.
Creation of Provision:
- A provision of 20% needs to be created on the remaining debtors after deducting the bad debts.
- This provision is made to account for potential losses due to non-payment of debts in the future.
Explanation:
- After adjusting the bad debts of 5000, the remaining debtors amount to 85000.
- A provision of 20% on 85000 amounts to 17000.
- This provision helps in anticipating and preparing for any future losses that may arise from non-payment of debts by the debtors.
- By creating this provision, the company is being conservative in its approach towards accounting for potential losses.
Conclusion:
- By making the necessary adjustments for bad debts and creating a provision for potential losses, the company ensures that its financial statements reflect a true and fair view of its financial position.
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Debtors 90000 -provision 5000 adjustment: 1. bad debts 5000 2. create 20% provision on debtors?
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Debtors 90000 -provision 5000 adjustment: 1. bad debts 5000 2. create 20% provision on debtors? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Debtors 90000 -provision 5000 adjustment: 1. bad debts 5000 2. create 20% provision on debtors? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Debtors 90000 -provision 5000 adjustment: 1. bad debts 5000 2. create 20% provision on debtors?.
Debtors 90000 -provision 5000 adjustment: 1. bad debts 5000 2. create 20% provision on debtors? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Debtors 90000 -provision 5000 adjustment: 1. bad debts 5000 2. create 20% provision on debtors? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Debtors 90000 -provision 5000 adjustment: 1. bad debts 5000 2. create 20% provision on debtors?.
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