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As-4

Accountancy

Sir!here there is already a provision created@5% on debtors balance and after balance sheet date a debtor of 2L suffered a loss and amount is not recoverable from him. It is an adjusting event and necessary adjustment shall be made in theFS. It is given that 2L shall be provided in addition to 5%.. But if such 5% provision covers such 2L amount is there any neccissulity of creating additional provision? Once plz see the attachment provided sir!

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lakshmi kollipara

CA Inter

★ 1K+

09-Jul-20 12:04

314

Answers (1)

This adjustment made is on account of loss on a single trade receivable (debtor) whereas, the provision of 5% was made on all the accounts receivable of the company put together. So additional provision is required.