MAY 2025Inter
During the process of Internal Reconstruction, JAY Ltd has come across the following adjustment: There is a contingent liability for which no provision had been made. This contingent liability was settled at ₹ 7,500 and also ₹ 6,000 was recovered from the insurance company in this regard. Which of the following is the correct treatment for the above adjustment?
A
(A) Reconstruction A/c Dr₹ 1,500 and Bank A/c Cr ₹1,500
B
(B) Reconstruction A/c Dr₹7,500 and Bank A/c Cr ₹7,500
C
(C) Contingent Liability A/c Dr ₹ 1,500 and Bank A/c Cr ₹ 1,500
D
(D) Profit and Loss A/c Dr 1,500 and Bank A/c Cr ₹1,500