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Author Topic: accounts doubt~~AS level!!  (Read 3442 times)

Offline ~cornelia~

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accounts doubt~~AS level!!
« on: October 16, 2011, 06:58:08 pm »
its a multiple choice question...tell me how we get the answer!?

the trail balance of a business at 31 may 2004 included,
Debtors- $13400(Dr)  and Provision for doubtful debts -$730(cr)

at 31 may 2004 it was found that the debtors included a bad debt of-$650. it was decided to adjust the  provision for doubtful debts at 4% of debtors. a debt of $420, which had been written off on jan 2003 was recovered on jan 2004.

what is the effect of these events on the P&L account for the year ended 31 may 2004??
a. Cr $10
b. Dr $10
c. Cr $36
d. Dr $36
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Offline lastgift

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Re: accounts doubt~~AS level!!
« Reply #1 on: October 18, 2011, 05:14:57 am »
Is this a past paper?
 ???

My answer came out to be 'B'. If its correct I can explain it.
« Last Edit: October 18, 2011, 05:17:26 am by lastgift »
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Offline ~cornelia~

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Re: accounts doubt~~AS level!!
« Reply #2 on: October 18, 2011, 05:05:05 pm »
^no its not pastpaper...its from the text book!

omg.yes! the answer is B...please tell me how? ???
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Offline Dasith

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Re: accounts doubt~~AS level!!
« Reply #3 on: October 18, 2011, 05:49:20 pm »
Debtors @ 31 may 2004 (13,400 - 650) =12750

Provision required @ 31 MAy 2004= 12750 x 4/100 =510
Balance in PFDD a/c =                                       =730

Provision needs to be reduced(credited in p/l) by(730-510) =  220 cr
Bad debts for the year                                                  = 650 dr (expense)
Bad debts recovered                                                     = 420 cr(income)

Net figure to be debited in P/L                                        =10 dr
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Offline lastgift

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Re: accounts doubt~~AS level!!
« Reply #4 on: October 19, 2011, 04:28:08 am »
There you go, explained.
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Offline ~cornelia~

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Re: accounts doubt~~AS level!!
« Reply #5 on: October 19, 2011, 08:11:13 pm »
^thanks alot Dasith and lastgift!!

one more question! how do we know wether its Dr or Cr??
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Offline lastgift

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Re: accounts doubt~~AS level!!
« Reply #6 on: October 19, 2011, 10:53:51 pm »
The total of expenses=$  650 is greater than the income $ 640.
The net effect of it implies that we need to reduce the profit by $10, thus you debit the P&L to record the loss. :)
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Offline Dasith

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Re: accounts doubt~~AS level!!
« Reply #7 on: October 20, 2011, 02:18:11 am »
Quote from: ~cornelia~ on October 19, 2011, 08:11:13 pm
^thanks alot Dasith and lastgift!!

one more question! how do we know wether its Dr or Cr??

u r welcome :D , When do u hav u r exams ?

Quote from: lastgift on October 19, 2011, 10:53:51 pm
The total of expenses=$  650 is greater than the income $ 640.
The net effect of it implies that we need to reduce the profit by $10, thus you debit the P&L to record the loss. :)

think u get da ans 4 u r q here ;)
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Offline lastgift

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Re: accounts doubt~~AS level!!
« Reply #8 on: October 20, 2011, 05:31:58 am »
Haha, yeah. Shared responsibility :P
You are through with your A levels?
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Offline Dasith

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Re: accounts doubt~~AS level!!
« Reply #9 on: October 20, 2011, 07:42:08 am »
Quote from: lastgift on October 20, 2011, 05:31:58 am
Haha, yeah. Shared responsibility :P
You are through with your A levels?


hehe XD
yeap i did it in may :D
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Offline lastgift

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Re: accounts doubt~~AS level!!
« Reply #10 on: October 20, 2011, 08:58:17 am »
Thought so! Read your posts all over the commerce section. Impressive fluency. :)
How did they go? Which other subjects?
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Offline Dasith

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Re: accounts doubt~~AS level!!
« Reply #11 on: October 20, 2011, 11:50:24 am »
Quote from: lastgift on October 20, 2011, 08:58:17 am
Thought so! Read your posts all over the commerce section. Impressive fluency. :)
How did they go? Which other subjects?


Hehe XD ,
hmm they went well, i took  Econ , accounts & computing
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Offline ~cornelia~

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Re: accounts doubt~~AS level!!
« Reply #12 on: October 20, 2011, 02:32:36 pm »
Quote from: lastgift on October 19, 2011, 10:53:51 pm
The total of expenses=$  650 is greater than the income $ 640.
The net effect of it implies that we need to reduce the profit by $10, thus you debit the P&L to record the loss. :)
i see! thanks alot.... :D

Quote from: Dasith on October 20, 2011, 11:50:24 am
Hehe XD ,
hmm they went well, i took  Econ , accounts & computing
oh man....i thought maybe you could help me with business too!!  :-\
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Offline Dasith

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Re: accounts doubt~~AS level!!
« Reply #13 on: October 20, 2011, 03:10:06 pm »
Quote from: ~cornelia~ on October 20, 2011, 02:32:36 pm
i see! thanks alot.... :D
oh man....i thought maybe you could help me with business too!!  :-\

BS hmm
Tohru Kyo Sohma might b able 2 help u out wid dat, i knw very little about BS , i might sometimes b able to help u out in BS in calculations & stuff .
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Offline ~cornelia~

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Re: accounts doubt~~AS level!!
« Reply #14 on: October 21, 2011, 08:35:52 pm »
oh good,
calculations are my weak point :)
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