A provision for doubtful debts account had an opening balance of ₦12,000. At the year end, debtors totalled ₦200,000 and the provision is to be maintained at 5% of debtors. What amount will be charged to the Profit and Loss Account?

Required provision = 5% × ₦200,000 = ₦10,000. Since the existing provision of ₦12,000 exceeds the required provision of ₦10,000, the excess of ₦2,000 would normally be a credit to the Profit and Loss Account. However, the required provision (₦10,000) is less than the opening provision (₦12,000), so ₦2,000 is released as income. Re-examining: the charge to P&L is a debit of ₦2,000 only if the provision needs to increase; here it decreases by ₦2,000, meaning ₦2,000 is credited to P&L. The correct answer is a debit of ₦2,000 to the provision account and a credit to P&L — but since the question asks what is 'charged' (i.e. the net P&L entry), the provision decreases so ₦2,000 is credited to P&L, meaning option C (₦2,000 debit to P&L) is incorrect and B is correct. Correction: Required provision ₦10,000 < Opening ₦12,000, so ₦2,000 is credited to P&L as income (reduction in provision). The answer is B.