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5. Depreciation:
Calculate the depreciation amount and it will appear on the Profit & loss A/c Debit side and it will be deducted from the concerned assets.
6. Interest on capital:
Calculate the interest on capital and write it on the Profit & Loss A/c Debit side. Again this amount should be added with capital in Liability side.
7. Interest on Drawings:
Calculate the interest on drawings and write it on the Profit & Loss A/c Credit side. Again this amount should be deducted from capital along with drawings.
(B) If the Bad debt appears only in the adjustment, then it will appear on the Profit & Loss A/c Debit side and again it will be deducted from Sundry debtors in Assets side.
(C) If the Bad debt appears in two places such as Question as well as Adjustment, then both amount should be added and written on the Profit & Loss A/c Debit side and Adjustment Bad debt amount will be deducted from Sundry debtors in the Assets side.
11. Doubtful Debt/ Bad Debt Provision/ Bad Debt Reserve/ Bad and Doubtful Debt:
(A) It the Doubtful debt appears only in the Question, then it will appear on the Profit & Loss A/c Credit side. (Old Provision)
(B) If the Doubtful debt appears only in the Adjustment, then it will appear on the Profit & Loss A/c Debit side and again it will be deducted from the Sundry debtors. (New Provision)
(C) If the doubtful debt appears in both the Question as well as in the Adjustment, then the Question amount is considered as Old Provision and the Adjustment as New Provision.
If the New provision is greater than that of (New Old), write it on the Profit & Loss A/c Debit side and New provision is deducted from debtors on the Balance Sheet Assets side.
If the Old provision is greater than that of (Old New), write it on the Profit & Loss A/c Credit side and New provision is deducted from debtors on the Balance Sheet Assets side.
Discount on Debtors:
(A) It the Discount on Debtors appears only in the Question, then it will appear on the Profit & Loss A/c Credit side. (Old Provision)
(B) If the Discount on Debtors appears only in the Adjustment, then it will appear on the Profit & Loss A/c Debit side and again it will be deducted from the Sundry debtors. (New Provision)
(C) If the Discount on Debtors appears in both the Question as well as in the Adjustment, then the Question amount is considered as Old Provision and the Adjustment as New Provision.
If the New provision is greater than that of (New Old), write it on the Profit & Loss A/c Debit side and New provision is deducted from debtors on the Balance Sheet Assets side.
If the Old provision is greater than that of (Old New), write it on the Profit & Loss A/c Credit side and New provision is deducted from debtors on the Balance Sheet Assets side.
Discount on Creditors:
(A) If the Discount on Creditor appears only in the Question, then it will appear in the Profit & Loss A/c Debit side.
(B) If the Discount on Creditor appears only in the Adjustment, then it will appear in the Profit & Loss A/c Credit side and it will be deducted from the Creditors in the Balance Sheet Liabilities side.