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Provision for bad debts and provision for discount

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Notes: 1. In 2010 bad debts have been written off to Profit & Loss A/c because there is no Provision for Doubtful Debts brought forward from 2009.

2. Provision for Discount is always created on the Debtors after deducting Provision for Doubtful Debts.

3. in 2010 Provision for Discount (6000 - 120) x2% = Rs.117.6 rounded off to the next Rupee - Rs.118.

3. In 2010 and 2011 no discount has been allowed, hence the amount has been carried forwarded.

answered Mar 1, 2016 by jbsclasses (3,971 points)