PRC-1 · Chapter 5 · Question 17 of 100
Following the previous scenario (Receivables: 150k, Bad debt write-off: 10k, Closing allowance required: 7k). If the opening allowance was Rs. 8,000, what is the TOTAL charge to the Statement of Profit or Loss for bad and doubtful debts?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 9,000
Explanation
The bad debt expense is Rs. 10,000. The allowance is decreasing from 8,000 to 7,000, creating an income/reduction in expense of Rs. 1,000. The net charge to Profit or Loss is 10,000 - 1,000 = Rs. 9,000.
More Bad and Doubtful Debts MCQs
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