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

Answer 1

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