Provision for bad debts to be increased to 15% .In balance sheet givenDebtors 20,000(Less) provision 1,000 19000For debtors What will be the effect in revaluation A/c ?
Dear Student, in this case, Provision for Bad-Debts is to increased by 15% of 20,000 i.e. Rs 3,000 and existing provision is Rs 1,000. Therefore, now it should be increased with Rs 2,000 (3,000 - 1,000). Thus, it should be shown on the Debit side of Revaluation Account.
|Provision for Bad-Debts||2,000|