1.If the management decides to lower down the provision for doubtful debt, it will:
Increase net profit
Decreases net profit
Increase gross profit
2.When at the time of sale, vendor gives credit terms of 3/10, net 30, 3 refers to the?
Interest rate
Discount rate
Installment rate
3.The entry to record bad debt for the period is:
Bad debt debit : Provision for bad debts credit
Bad debt debit : Debtors credit
Provision for bad debts debit : bad debts credit
4.Bad debts are recorded in?
Balance sheet
Profit & loss account
Cash flow statements
5.Bad debts are recorded on which accounting principle:
Going concern
Substance over form
Prudence concept
6.Company decided to raise provision for bad debts from 3{1bb28fb76c3d282be6cfd0391ccf1d9529baae691cd895e2d45215811b51644c} to 5{1bb28fb76c3d282be6cfd0391ccf1d9529baae691cd895e2d45215811b51644c}. What will be the journal entry to record this?
Income statement debit : provision for doubtful debt
Bad debt expenses debit : Income statement credit
Provision for bad debts debit : income statement credit
7.To write off bad debt, following entry is passed:
Provision for bad debts debit : debtors credit
Provision for bad debts debit : bad debts credit
bad debts debit : debtors credit
8.bad debts written off subsequently recovered, the journal entry to record this:
Accounts receivable debit: provision for bad debts credit / cash debit : accounts receivable credit
Accounts receivable debit: bad debts credit / cash debit : accounts receivable credit
Bad debts debit: provision for bad debts credit / cash debit : accounts receivable credit
- The best method to record write off bad debts is:
Direct method
Indirect method
10.Normaly balance of Provision for bad debts is:
Debit balance
Credit balance
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