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Question
At the time of admission of new partner Vasu, old partners Paresh and Prabhav had debtors of ₹ 6,20,000 and a provision for doubtful debts of ₹ 20,000 in their books. As per terms of admission, assets were revalued, and it was found that debtors worth ₹ 15,000 had turned bad and hence should be written off. Which journal entry reflects the correct accounting treatment of the above situation?
Options
Bad Debts A/c ...Dr. 15,000 - To Sundry Debtors - 15,000 Provision for Doubtful Debts A/c ...Dr. 15,000 - To Bad Debts A/c - 15,000 Bad Debts A/c ...Dr. 15,000 - To Sundry Debtors - 15,000 Revaluation A/c ...Dr. 15,000 - To Provision for Doubtful Debts A/c - 15,000 Revaluation A/c ...Dr. 15,000 - To Sundry Debtors A/c - 15,000 Bad Debt A/c ...Dr. 15,000 - To Revaluation A/c - 15,000
Solution
| Bad Debts A/c ...Dr. | 15,000 | - |
| To Sundry Debtors | - | 15,000 |
| Provision for Doubtful Debts A/c ...Dr. | 15,000 | - |
| To Bad Debts A/c | - | 15,000 |
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