PRC-1 · Chapter 5 · Question 89 of 100
A customer owing Rs. 2,000 is declared bankrupt. The liquidator pays 30% as a final settlement. What is the bad debt expense to be recognized?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 1,400
Explanation
The business receives Rs. 600 (30%). The remaining Rs. 1,400 (70%) is irrecoverable and must be written off as a bad debt.
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