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Accounting MCQs / Q&A

The creation of provision for doubtful debts given as an adjustment requires____________?

Accounting MCQs / Q&A /

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

The adjustment for provision for bad debts account given in the adjustments is to debit P&L A/c and deduct from Sundry Debtors, the amount of provision for bad debts. Provision for bad debts is created against Sundry Debtors and therefore deducted from Sundry Debtors and Debited to P&L A/c as it is a charge against P&L A/c.

The creation of provision for doubtful debts given as an adjustment requires____________? Read More »

Accounting MCQs / Q&A

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

Accounting MCQs / Q&A /

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

Provision for Bad Debts Account is created for writing off bad debts. Since the provision for bad debts is a credit balance account, If the actual bad debts exceed the provision created then there will be debit balance of provision for bad debts account.

If actual bad debts are more than the provision for bad debts, then there will be a_____________? Read More »

Accounting MCQs / Q&A

Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be?

Accounting MCQs / Q&A /

Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be?

A. Written down to zero or its scrap value
B. Shown in the Balance Sheet at its replacement cost
C. Shown in the Balance Sheet at cost, but classified as a non-current asset
D. Carried in the accounting records at cost until it is sold

Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be? Read More »

Accounting MCQs / Q&A