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JAMB Principles of Accounts 2000 Question 2

Question 2

Bad Debts and Provisions

To write off bad debt, debit

  1. A.debtor's account and credit provision for bad debt
  2. B.bad debt account and credit debtor's account
  3. C.debtor's account and credit bad debt
  4. D.provision for bad debt account and credit debtor's account.
Show the answer and explanation

Answer: B (bad debt account and credit debtor's account)

Explanation

Writing off a bad debt: debit bad debts account (an expense) and credit the debtor's account to clear it.