Which of the following is a commonly used base to create the provision for doubtful debts?

A Total purchases
B Total credit sales
C Total current assets
D Total current liabilities

Correct Answer: Total credit sales

Total credit sales is a commonly used base to create the provision for doubtful debts. The provision for doubtful debts is the estimated amount of bad debt that will arise from accounts receivable that have been issued but not yet collected. It is identical to the allowance for doubtful accounts.
Bissoy MCQ
#Commerce #Accounting

Related Questions

Which accounting concept dictates the inclusion of 'provision for doubtful debts' in the financial statements?
A Accrual concept
B Matching concept
C Going concern concept
D Prudence concept
What is the meaning of doubtful in the following sentence? Because of along drought, farmers are doubtful about the prospect of a good yield
A fearful
B pessimistic
C debating
D uncertain
রেওয়ামিলে দেনাদার ৫২,০০০ টাকা, লিখিত অনাদারি পাওনা ২,০০০ টাকা এবং অলিখিত অন্যদায়ি পাওনা ২,০০০ টাকা। যদি দেনাদারের ওপর ৫% সঞ্চিতি রাখা হয় এবং অনাদায়ি পাওনা সঞ্চিতির ক্রেডিট ব্যালেন্স ১,০০০ টাকা হয়, তাহলে চলতি বছরে অন্যনায়ি পাওনা সঞ্চিতি কত রাখতে হবে? (In trial balance, account receivable is of Tk. 52,000 recorded bad debt of Tk.2,000 and unrecorded bad debt of Tk. 2,000. What is the amount of allowance for doubtful accounts kept in current year if the allowance is 5% on accounts receivable and credit balance in allowance for doubtful accounts currently is of Tk. 1,000 )
A ২,৫০০ টাকা (Tk. 2,500)
B ১,০০০ টাকা (Tk. 1,000)
C ২,৪০০ টাকা (Tk. 2,400)
D 1,500 টাকা (Tk. 1,500)
Accounts receivable at the end of the month is Tk 80,000. Bad debts are expected to be 5% of accounts receivable. If Allowance for Doubtful Accounts has a credit balance of Tk 1,000 before adjustment, what is the balance after adjustment?
A Tk 2,000
B Tk 3,000
C Tk 4,000
D Tk 5,000
E None of these
People who pay their debts are trusted. Here who pay their debts is-
A Phrase
B Clause
C Idioms
D Gerund
A company has trade debtors at the year-end amounting to Ta. 2,18,000. One of the debtors, value TA. 8,000 is known to be uncontrollable. The company takes a 5% provision for bad debts each year and last year's provision amounted to TA. 2,000 which of the following figures will appear in the profit and loss account as the total bad debt charge for the year?
A TA. 18,900
B TA. 18,500
C TA.16,300
D TA. 10,500
A company has trade debtors at the year-end amounting to TA. 2,18,000. One of the debtors, value TA. 8,000 is known to be noncollectable, The company takes a 5% provision for bad debts each year and last year's provision amounted to TA. 2,000. Which of the following figures will appear in the profit and loss account as the total bad debt charge for the years?
A TA. 18,900
B TA. 18,500
C TA. 16,300
D TA, 10,500
Which of the following is the effect on net income if a business decreases its provision for bad debts?
A It will increase net income
B It will decrease net income
C No effect
D It will increase gross profit and net income
"I was doubtful whether he had passed." Negative form of it is-
A I had no doubt whether he had passed.
B I was not sure whether he had passed.
C I was not doubtful whether he had passed.
D I was not doubtless whether he had failed.
A Business shows total debtors' balance TK. 4,00,000 in its sales ledger at the end of its financial period . One customer owing TK. 40,000 is bankrupt and there is on possibility of getting the debt paid. A further 2% of debtors are considered doubtful . What debtors' total will be included as a current asset in the balance sheet ?
A TK. 4,00,000
B TK. 3,52,800
C TK. 3,52,000
D TK. 36,200

Next steps