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JAMB Principles of Accounts 2010 Question 46

Question 46

Bad Debts and Provisions

Sundry debtors in the balance sheet of Onoja Bakery and Sons totalled ₦800 000. A provision of 2% was made for discount and 5% provision for bad and doubtful debts.
Find the amount for sundry debtors after provision.

  1. A.₦760 000
  2. B.₦744 800
  3. C.₦744 000
  4. D.₦784 000
Show the answer and explanation

Answer: B (₦744 800)

Explanation

Bad debts: 5% × 800 000 = ₦40 000, leaving ₦760 000. Discount: 2% × 760 000 = ₦15 200. Net debtors = ₦744 800.