The entry is incorrect. Because we donot touch CAPITAL A/c for making provisions or reserves. We touch P & L A/c, so Dr. should be given to P & L A/c.
Ashish Tewani
(CA Final Article at V.P. Mehta & Co.)
(83 Points)
Replied 02 September 2014
The entry is incorrect. Because we donot touch CAPITAL A/c for making provisions or reserves. We touch P & L A/c, so Dr. should be given to P & L A/c.
ali
(Student CA CPT )
(130 Points)
Replied 04 September 2014
yes sir ur rite :) thnxx so much. but i made on a assumption that it ultimately reduces the capital.. means taking out some amount from the profits which will dcreases the capital..??
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