Financial Statements - II
Chapter 10: Financial Statements - II · ACCOUNTANCY · EN medium
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meeting the loss due to bad debts incurred during the next year. The provision for doubtful debts brought forward from the previous year is called the opening provision or old provision . When such a provision already exists, the loss due to bad debts during the current year are adjusted against the same and while making provision for doubtful debts required at the end of the current year is called new provision. The balance of old provision as given in trial balance should also be taken into account. Let us take an example to understand how bad debts and provision for doubtful debts are recorded. An extract from a trial balance on March , Write-off further bad debts Rs.
📖 Accounts 10 (1) · Page 15
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meeting the loss due to bad debts incurred during the next year. The provision for doubtful debts brought forward from the previous year is called the opening provision or old provision . When such a provision already exists, the loss due to bad debts during the current year are adjusted against the same and while making provision for doubtful debts required at the end of the current year is called new provision. The balance of old provision as given in trial balance should also be taken into account.
Let us take an example to understand how bad debts and provision for doubtful debts are recorded. An extract from a trial balance on March , Write-off further bad debts Rs. , and create a provision for doubtful debts @ % on debtors.
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