Bad and Doubtful Debts Accounting Quiz
1. What is the purpose of creating a provision for doubtful debts?
A) To increase profit
B) To reduce profit
C) To match expenses with revenue
D) To increase assets
Answer: C) To match expenses with revenue
2. Which account is debited when a bad debt is written off?
A) Bad Debts Account
B) Provision for Doubtful Debts Account
C) Debtors Account
D) Profit and Loss Account
Answer: A) Bad Debts Account
3. What is the effect of creating a provision for doubtful debts on the balance
sheet?
A) Increases assets
B) Decreases assets
C) Increases liabilities
1. What is the purpose of creating a provision for doubtful debts?
A) To increase profit
B) To reduce profit
C) To match expenses with revenue
D) To increase assets
Answer: C) To match expenses with revenue
2. Which account is debited when a bad debt is written off?
A) Bad Debts Account
B) Provision for Doubtful Debts Account
C) Debtors Account
D) Profit and Loss Account
Answer: A) Bad Debts Account
3. What is the effect of creating a provision for doubtful debts on the balance
sheet?
A) Increases assets
B) Decreases assets
C) Increases liabilities
