PRC-1 · Chapter 5 · Question 53 of 100
When a business decides to formally write off an irrecoverable debt of Rs. 15,000, what is the standard double-entry journal record?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Bad Debt Expense Rs. 15,000; Credit Trade Receivables Rs. 15,000
Explanation
Writing off a bad debt requires recording the loss as an expense (Debit Bad Debt Expense) and permanently removing the debt from the customer's account in the ledger (Credit Trade Receivables/Accounts Receivable).
More Bad and Doubtful Debts MCQs
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- Q57An irrecoverable debt of Rs. 5,000 that was formally written off in the previous year is unexpectedly paid by the customer via cheque…
- Q58What is the specific difference between a 'Specific Allowance' and a 'General Allowance' for doubtful debts?
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