PRC-1 · Chapter 5 · Question 4 of 100
What is the correct double-entry journal record to write off a confirmed irrecoverable (bad) debt?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Debit Bad Debt Expense, Credit Trade Receivables
Explanation
Writing off a bad debt requires recognizing the loss (Debit Bad Debt Expense) and permanently removing the uncollectible amount from the customer's account (Credit Trade Receivables).
More Bad and Doubtful Debts MCQs
- Q6What is the correct journal entry to record a year-end INCREASE in the general allowance for doubtful debts?
- Q7If an entity determines that its required closing allowance for doubtful debts is lower than its opening balance, what is the journal…
- Q8An irrecoverable debt of Rs. 5,000, which was formally written off two years ago, is unexpectedly paid by the customer via cheque. What is…
- Q9When preparing an aging analysis of accounts receivable, which category of customers statistically carries the highest probability of…
- Q10At the end of the financial year, the 'Bad and Doubtful Debts Expense' account is formally closed by transferring its final balance to…