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JAMB Principles of Accounts 2009 Question 45

Question 45

Company Accounts

Provision for bad and doubtful debts in companies final acounts is treated in

  1. A.trading account
  2. B.profit and loss account
  3. C.fund flow statement
  4. D.cash flow statement
Show the answer and explanation

Answer: B (profit and loss account)

Explanation

The provision (or its increase) is an expense charged to the profit and loss account.