Question :
| Debtors | 16,000 | |
| Less: Provision for Doubtful Debts | 800 | 15,200 |
1. Debtors of Rs. 1,000 be written off as it is no longer receivable.
2. Provision for Doubtful Debts be maintained at the existing rate.
Revaluation account will be
Option 1: Debited by Rs 750
Option 2: Debited by Rs 550
Option 3: Debited by Rs 950
Option 4: None of the above
Correct Answer: Debited by Rs 950
Solution :
Answer =
Debited by Rs 950
Bad debt A/c......Dr 1,000
To Debtors A/c 1,000
Provision for doubtful debt A/c.........Dr 800
Revaluation A/c................................Dr 200
To Bad debt A/c 1,000.
Revaluation A/c.........Dr 750
To Provision for doubtful debt A/c 750
(16,000-1,000= 15,000×5%)
Hence, the correct option is 3.
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