In question two, I don’t understand why we debit the $ 72000 in the provision account and then credit the $78000 in the statement of profit and loss. I thought that when your increasing the provision it is supposed to be credited which in this case we would credit the Guarantee Provision Account with $72000 leaving it with a balance of $222,000 and DR. SOCI $ 222,000
You are correct – and the answer is being amended. I have already altered the answer but not yet submitted it to Admin so that’s why it’s not yet uploaded to the site
isabellecharis says
In question two, I don’t understand why we debit the $ 72000 in the provision account and then credit the $78000 in the statement of profit and loss. I thought that when your increasing the provision it is supposed to be credited which in this case we would credit the Guarantee Provision Account with $72000 leaving it with a balance of $222,000 and DR. SOCI $ 222,000
MikeLittle says
You are correct – and the answer is being amended. I have already altered the answer but not yet submitted it to Admin so that’s why it’s not yet uploaded to the site
Yang says
thank you very much?
Yang says
Dear Sir,why the answer for Q1 not Dr :Asset/ Cr:provision 3million
Yang says
the resoration cost should be capitalised,isn’t it?
yudixsh says
restoration cost should be capitalised and provision must be recorded
MikeLittle says
What does the answer say?