Related Mcqs:

1. The entry for creating a Provision for bad debts is_____________?

   A. Debit Provision for Bad Debts A/c and credit Debtors A/c
   B. Debit Debtors A/c and credit Provision for Bad Debts A/c
   C. Debit Provision for Bad Debts A/c and credit Profit & Loss A/c
   D. Debit Profit and Loss A/c and credit Provision for Bad Debts A/c.

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2. Bad debts recovered account will be transferred to______________?

   A. Debtor‘s Account
   B. Profit and Loss Account
   C. Provision for Doubtful Debt Account
   D. Either B or C above
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3. Bad debts recovered is:

   A. Credited to P&L A/c
   B. Debited to P&L A/c
   C. Reduced from debtors in Balance Sheet
   D. Added to debtors in Balance Sheet
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4. The creation of provision for doubtful debts given as an adjustment requires____________?

   A. Debit Profit and Loss Account and deduct the provision from debtors
   B. Credit Profit & Loss Account and deduct the provision from debtors
   C. Credit Profit and Loss Account and add the provision to debtors
   D. Debit Profit & Loss Account and add the provision to debtors

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5. An increase in provision for bad debt will____________?

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

6. Debts which are payable in the course of a month are called _____________?

   A. External liabilities
   B. Fixed liabilities
   C. Current liabilities
   D. Liquid Liabilities

7. Consider the following data for a company during the month of June 2012 Budgeted hours 4,000 Standard hours for actual production 4,400 Maximum possible hours in the budget period 4,800 Actual hours 3,800 The activity ratio of the company during the month is

   A. 111%
   B. 120%
   C. 95%
   D. 117%

8. 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

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9. 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

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10. Provision is created for____________?

    A. Unknown Liabilities
    B. Known Liabilities
    C. Creation of Secret Reserves
    D. All the Three