passwella.
Menu

WAEC Financial Accounting 1998 Question 28

Question 28

Bad Debts and Provisions

Provision for discount on debtors is to be

  1. A.debited to Profit and Loss Account
  2. B.credited to Profit and Loss Account
  3. C.debited to Debtors Account
  4. D.credited to Debtors Account
  5. E.debited to Provision for Bad Debts Account.
Show the answer and explanation

Answer: A (debited to Profit and Loss Account)

Explanation

Creating the provision is an expense: debit profit and loss, credit provision for discount.