An increase in provision for bad debt will____________?

Related Mcqs:

1. If actual bad debts are more than the provision for bad debts, then there will be a_____________?

   A. Credit balance of Provision for Bad Debts Account
   B. Debit balance of Provision for Bad Debts Account
   C. Debit balance of Bad Debts Account
   D. Debit balance of Discount on Debtors Account

2. 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.

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. 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

6. 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

7. Provision is created for____________?

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

8. 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

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

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

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

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