Question

On preparing the final accounts of Suresh, the bad debt account has a balance of ₹ 800 and the sundry debtor account has a balance of ₹ 16,000 of which ₹ 1,200 is to be written off as further bad debts. Pass adjusting entry for bad debts. And also show how it would appear in the profit and loss account and balance sheet.

Answer 1

Adjusting Entry-

Date	Particulars	L.F.	Debit ₹	Credit ₹
	Bad debts A/c   Dr.    To Sundry debtors A/c (Further bad debts written off)		1,200	1,200

Profit and Loss Account-

Dr.                                                                             Cr.

Particulars	₹	₹	Particulars	₹
To Bad debts	800	2,000
Add: Further bad debts	1,200

Balance Sheet-

Liabilities	₹	Assets	₹	₹
		Sundry debtors	16,000	14,800
		Less: Bad debts written off	1,200