State the reasons why the following items appear or not in the Profit

1.	State the reasons why the following items appear or not in the Profit and Loss A/c.1. Bad debts2. Drawings3. Provision for bad debts.
Answer» 1. Bad debts is an indirect expenditure and hence it appears in the Profit and Loss A/c. 2. Drawings will reduce the capital a/c. Therefore, it cannot be shown in the P/L a/c. 3. Provision for bad debt is a charge against profit. Hence it will appear in the P/LA/c.

State the reasons why the following items appear or not in the Profit and Loss A/c.1. Bad debts2. Drawings3. Provision for bad debts.

Answer»

1. Bad debts is an indirect expenditure and hence it appears in the Profit and Loss A/c.

2. Drawings will reduce the capital a/c. Therefore, it cannot be shown in the P/L a/c.

3. Provision for bad debt is a charge against profit. Hence it will appear in the P/LA/c.

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State the reasons why the following items appear or not in the Profit and Loss A/c.1. Bad debts2. Drawings3. Provision for bad debts.

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