PRC-1 · Chapter 5 · Question 20 of 100
Using the data from the previous question (Bad debt: 28,500, Allowance Increase: 4,000), what is the total expense charged to the Statement of Profit or Loss for the year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 32,500
Explanation
The total charge consists of the actual bad debts written off (Rs. 28,500) plus the increase required in the allowance account (Rs. 4,000). Total expense = 28,500 + 4,000 = Rs. 32,500.
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