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Question
Answer in one sentence only.
What is bad debts?
One Line Answer
Solution
The amount that becomes irrecoverable from the debtors is known as bad debt. Bad debts are losses for a business and, therefore, are shown on the debit side of the Profit and Loss Account.
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Effects of Adjustments-Bad and Doubtful Debts
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RELATED QUESTIONS
The amount which is not recoverable from the debtors.
| Group ‘A’ | Group ‘B’ |
| (a) Bad debts | (1) Dishonour of cash bill |
| (b) Excess of assets over liabilities | (2) Indicates profit of joint venture |
| (c) Notary public | (3) Indicates loss of joint venture |
| (d) Credit balance of joint venture a/c | (4) System software |
| (e) Operating system | (5) Drawings |
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(6) Capital |
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(7) Recoverable amount from debtors |
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(8) Non-recoverable amount from debtors |
Give the word / term or phrase which can substitute the following statement.
The amount which is not recoverable from debtors.
State whether the following statement is True or False.
Discount allowed to debtors is called as bad debts.
