Following is an extract of Balance Sheet of a firm on 31st March 2022, with additional information.
As on 31st March,2022
| Liabilities | ₹ | Assets | ₹ |
|
Debtors 43,000 (-) Provision for doubtful debts 1,000 |
42,000 |
Additional Information :
Debtors realised 95% of their book value of ₹43,000.
Record journal entry for realisation of debtors.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Bank A/c Dr 40,850 To Realisation A/c 40,850
On dissolution, debtors are transferred to the debit of the Realisation Account at their gross book value (₹43,000), and the provision for doubtful debts (₹1,000) is transferred to its credit separately.
Amount realised = 95% of ₹43,000 = ₹40,850
The cash received is brought in by debiting Bank and crediting Realisation:
Bank A/c Dr. 40,850
To Realisation A/c 40,850
NCERT (2026-27 edition): NCERT (2026-27 edition):
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