Palgrave Macmillan: Companion website for Collis - Business Accounting: Chapter 8c

Trade debtors are classified as:
1. capital expenditure
2. revenue expenditure
3. current assets
4. intangible assets
The figure for bad debts is shown in the balance sheet under:
1. fixed assets
2. current assets
3. current liabilities
4. none of these
A bad debt is written off by:
1. deducting it from cost of sales
2. deducting it from expenses
3. adding it to expenses
4. adding it to current liabilities
A bad debt is created when:
1. the debt is outstanding for more than 12 months
2. a trade debtor goes out of business
3. a trade debtor can be traced
4. it is not known when the debt will be paid
An increase in the provision for doubtful debts will result in:
1. an increase in expenses in the profit and loss account
2. a decrease in expenses in the profit and loss account
3. an increase in current liabilities
4. a decrease in current liabilities
A decrease in the provision for doubtful debts will result in:
1. an increase in expenses in the profit and loss account
2. a decrease in expenses in the profit and loss account
3. an increase in current liabilities
4. a decrease in current liabilities

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