Answering Exams

If actual bad debts are more than the provision for bad debts, then there will be 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(Correct)
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.

 

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