The process of paying off debt over time in regular installment of interest & principal sufficient to repay the loan in fully by its maturity date.

Related Mcqs:

1. An increase in provision for bad debt will____________?

   A. Decrease net income
   B. Decrease liabilities
   C. Increase net income
   D. Increase liabilities

2. Discount for quick repayment of debt is normally referred as____________?

   A. Trade discount
   B. Prompt payment discount
   C. Cash discount
   D. Bulk discount

3. Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?

   A. The bad debt expense is not matched with the related sales
   B. Revenue is overstated in the year of sales
   C. It violates the matching principle of accounting
   D. All of the above

4. At the time of preparation of financial accounts, bad debt recovered account will be transferred to?

   A. Debtors A/c
   B. Profit & Loss A/c
   C. Profit & Loss Adjustment A/c
   D. Profit & Loss Appropriation A/c

5. A discount of $2000 was given to a supplier on his prompt repayment of debt but the cashier entered the gross amount in cash book. What should be the adjustment in cash to work out the correct balance of cash book?

   A. $2000 will be debited in cash book
   B. $2000 will be credited in cash book
   C. $4000 will be debited in cash book
   D. $4000 will be credited in the cash book

6. Cash discount is allowed on _______ repayment of debt.

   A. Lump sum
   B. Prompt
   C. Actual
   D. None of them

7. Which of the following statement is considered as the accountant’s snapshot of firm’s accounting value as of a particular date?

   A. Income Statement
   B. Balance Sheet
   C. Cash Flow Statement
   D. Retained Earning Statement

8. A Bill of Exchange is drawn on 1st April, 2018 payable after 3 months. The due date of the bill is?

   A. 30th June,2018
   B. 1st July,2018
   C. 4th July,2018
   D. 4th August,2018

9. X draws a Bill of Exchange on Y for 10,000 on 1-1-2013 for 3 months. The due date of the bill will be_________?

   A. 4-4-2013
   B. 3-4-2013
   C. 1-4-2013
   D. 31-3-2013

10. Bank sent debit advice of $500 to company being interest on overdraft. It wasn’t entered in cash book. Identify the correct adjustment in cash book.

    A. $500 will be debited
    B. $500 will be credited
    C. Non-adjustable
    D. $1000 will be subtracted