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Multiple Choice Questions

Following is the Trial Balance of a firm as on 31 12 2022 Rs Rs Trade receivables 25 00 000 nbs...........

General Accounting Principles Others

Following is the Trial Balance of a firm as on 31-12-2022 :

	Rs	Rs
Trade receivables	25,00,000
Provision for doubtful debts		1,40,000
Bad debts	40,000

The additional bad debts during the year are Rs 2,00,000. The firm has a policy of maintaining a provision for doubtful debts equal to 10% of the trade receivables' balances The total amount to be charged to Profit /c (for the year ending 31-12-2022) for bad debts written off and provision created will be

This questions was previously asked in

EPFO APFC 2023

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Rs 2,50,000

Rs 1,30,000

Rs 90,000

Rs 3,30,000

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Explanation:

- Bad Debts Write-off: During the year, additional bad debts of Rs 2,00,000 are identified. The total bad debts, including the existing Rs 40,000, sum up to Rs 2,40,000.

- Provision for Doubtful Debts: The firm maintains a provision of 10% of trade receivables. Trade receivables are Rs 25,00,000, so the provision should be Rs 2,50,000.

- Provision Adjustment: The existing provision is Rs 1,40,000. To reach Rs 2,50,000, an additional Rs 1,10,000 is required.

- Total Charge to Profit and Loss Account: Bad debts of Rs 2,40,000 plus the additional provision of Rs 1,10,000 totals Rs 3,50,000.

- Correct Answer: Rs 3,50,000 (not listed among the options provided, indicating a possible issue in the options).

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