While doing revaluation of assets in case of admission of partner, there is a statement" All debtors are good". What does it mean?
Answer & explanation
Correct answer: option 4
This statement means all debtors are good and there is no need of provision anymore so it will be a gain for the firm.
Following entry will be passed for this-
Provision for doubtful debts Dr..
To Revaluation A/c