CH9 Bad Debts and Allowance For Doubtful Debts

A Bad Debts is the amount which is _________.

• incurred by the supplier

• owed by one trader to another

• not shown in the Trial Balance

• unlikely to be paid by debtor

Enterprise which sells goods on credit will usually cause uncollectable. When bad debts happen, adjusting entries should be made on the balance day and the account debited is __________.

• Bad Debts

• Loss

• Allowance For Doubtful Debts

• Bad Debts Recovered

Bad debts recovered from the debtors are recorded in the __________.

• Cash Book

• Sales Ledger

• Sales Day Book

• Purchases Day Book

Allowance For Doubtful Debts is created __________.

• when the firm is bankrupt

• when all the assets are sold

• to cancel a particular bad debts

• to provide for possible bad debts

A decrease in the Allowance For Doubtful Debts will __________.

• decrease the cash balance

• increase the profit for the year

• decrease the profit for the year

• increase the bad debts for the year

An Allowance For Doubtful Debts was RM 200 and debtors was RM3,500 at the end of an accounting period. The company decided to make the allowance up to 10% of the debtors. What would be the new Allowance For Doubtful Debts?

• RM200

• RM250

• RM350

• RM550

An Allowance For Doubtful Debts was RM 200 and debtors was RM3,500 at the end of an accounting period. The company decided to make the allowance up to 10% of the debtors. What amount should be recorded in the Profit And Loss account?

• RM200

• RM350

• RM150

• RM550

How should the Allowance For Doubtful Debts in a Trial Balance be shown in the financial reports

• Shown as an expenses in Profit And Loss account

• Shown as a revenue in Profit And Loss account

• Shown as a current liability in Statement Of Financial Position

• Shown as a deduction from debtors in Statement Of Financial Position

• RM500

• RM200

• RM194

• RM190

On 1 January 2014, the balance on the Allowance For Doubtful Debts account was RM 816.

Bad Debts for the year amounted to RM 3,000 and discounts allowed was RM 1,500.

On 31 December 2014, debtors were RM 18,000.

Allowance For Doubtful Debts of 5% was to be made. What was the Allowance For Doubtful Debts to be posted to the Profit And Loss Account for the year ended 31 December 2014?

• RM84 Increase in Allowance For Doubtful Debts

• RM84 Decrease in Allowance For Doubtful Debts

• RM66 Decrease in Allowance For Doubtful Debts

• RM141 Decrease in Allowance For Doubtful Debts