FINAL ACCOUNT - Adjustment 3

12th BOOK KEEPING BY AJAYSANTHOSH MOURYA

Sr.No.	Type of Adjustment	Adjustment Entry	How dealt with in
			Trading or Profit and Loss A/c	Balance Sheet
12	Provision for Bad and Doubtful Debts	Profit and Loss A/c        Dr	i. If the provision for bad and	Assets side by
		To Provision for Bad	doubtful debts is given outside	way of deducting
		and doubtful debts A/c	the Trial balance, then it is shown	New Provision
			on the debit side of Profit and loss	alone from
			Loss account.	Sundry debtors
			ii. If provision for bad and doubtful
			debts is given in the Trial Balance
			(Old) and also in the adjustment
			(New):
			Add new provision for bad and
			doubtful debts with bad debts
			written off.
			a) If the old provision for bad and
			doubtful debts is less than the
			above total, then the difference
			will be shown on the debit side of
			the Profit and Loss account.
			b) If the old provision for bad and
			doubtful debts is more than the
			above total, then the difference
			should be shown on the credit
			side of the Profit and Loss acount
13	Provision for Discount on Debtors	Profit and Loss A/c      Dr	Debit side of Profit and Loss A/c	Assets side by
		To Provision for discount	(Amount of provision for discount	way of deduction
		on debtors A/c	is ascertained on good debtors)	from Sundry
				debtors (after
				deduction of bad
				debts and new
				provision for bad
				and doubtful debts