PRC-1 · Chapter 2 · Question 27 of 100
When an entity decides to write off a customer's outstanding balance as an irrecoverable (bad) debt, which book of prime entry must be used?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) General Journal
Explanation
Writing off a bad debt is a non-routine adjustment that does not involve immediate cash flow or standard inventory trading, so it is processed through the general journal.
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