PRC-1 · Chapter 2 · Question 42 of 100
'Emerald Traders' determines that a credit customer's outstanding balance of Rs. 15,000 is irrecoverable and must be formally written off as a bad debt. Which book of prime entry is used to process this transaction?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) General Journal
Explanation
Writing off a bad debt is an internal, non-routine accounting adjustment that does not involve the flow of cash or the return of inventory. Therefore, it is recorded in the General Journal.
More Books of Prime Entry MCQs
- Q44'Pioneer Manufacturing' sends a 'Goods Dispatched Note' (GDN) to a customer along with a delivery of products. What is the accounting…
- Q45'Apex Supplies' sells goods with a list price of Rs. 50,000 to a customer, less a 10% trade discount. The customer pays immediately by…
- Q46A supplier sends a 'Statement of Account' to 'Nimbus Traders' at the end of the month showing a total balance due of Rs. 120,000. How…
- Q47'Titanium Motors' returns defective spare parts to a supplier that were previously purchased on credit. Which document is received from…
- Q48What is the primary administrative and control advantage of using the imprest system for petty cash?