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what is proviosion for bad debts and provision for bad and
doubtfull debts
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Answer / sanjay lashkari
Provision for Bad debts-
It is used along with the account Accounts Receivable in
order to report the net realizable value of the accounts
receivable.
Provision for bad and doubtful debts-A doubtful debt is a
debt, which the business considers may not be paid.
| Is This Answer Correct ? | 6 Yes | 3 No |
Answer / saiyad aejaj
in account bad debts are carryforward in p/l a/c but we
also create provision if we create this account we credit
baddebts balance to this account and doubtfull debt also
| Is This Answer Correct ? | 3 Yes | 2 No |
Answer / s
procedure of provision are same for bad debts and doubtful debts and the entry for this:
bad and doubtful debts a/c dr.
to provision for bad and doubtful debts a/c
| Is This Answer Correct ? | 1 Yes | 0 No |
The following information is extracted from the audited books of accounts of a chain of food stores for the period ended 31st December 2015. Revenue Statement (Trading and Profit and Loss Account for the year ended 31st December 2015. BWP’000 BWP’000 Sales 460 Cost of good sold (220) Gross profit 240 Wages 50 Other expenses 30 (80) Net Profit 160 Note: The purchase figure included in the cost of goods sold of P255 000. Balance Sheet as at 31st December 2015 BWP’000 BWP’000 Fixed Assets 400 Current assets: Stock 80 Debtors (trade) 120 Bank 400 ----- [600] Current liabilities: Trade creditors 300 ------ [300] 300 Net Assets 700 ==== Financed by: Share capital 600 Revenue reserves 100 ------ 700 Shareholders Funds 700 ===== Required: (a) Calculate the following accounting ratios: (i) Current ratio (ii) Acid test ratio (iii) Stock turnover (in days) (iv) Debtors turnover (in days) (v) Creditors turnover (in days) (vi) Return on capital employed (ROCE) (vii) Gross profit percentage (viii) Net profit percentage (b). Give a brief comment on the performance of the company, based on the above ratios.
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