PRC-1 · Chapter 5 · Question 100 of 100
At 1 January 2017, the allowance for receivable of Sidra was Rs. 35,000. During the year ended 31 December 2017, debts totaling Rs. 15,000 were written off. It was decided the allowance should be Rs. 30,000 as at Dec 31. What is the amount charged to the statement of comprehensive income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 10,000
Explanation
Bad debts written off = 15,000 expense. The allowance decreases from 35,000 to 30,000, creating an income (or reduction of expense) of 5,000. Net charge = 15,000 - 5,000 = Rs. 10,000.
More Bad and Doubtful Debts MCQs
- Q2What is the specific nature of the 'Allowance for Doubtful Debts' account in the general ledger?
- Q3Which of the following scenarios best describes a situation where an account should be classified as a 'Bad Debt' rather than a 'Doubtful…
- Q4What is the correct double-entry journal record to write off a confirmed irrecoverable (bad) debt?
- Q5Which of the following statements regarding 'Good Debts' and 'Doubtful Debts' is completely correct?
- Q6What is the correct journal entry to record a year-end INCREASE in the general allowance for doubtful debts?