Accounting - Study Mode

[#1366] A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debt ommission?
Correct Answer

(B) Net profit would increase

Explanation

Solution: A firm has not recorded the bad debts by mistake. Net profit would increase is the effect of bad debt ommission.

[#1367] When it is certain that a debt won't be recovered. Which of the following is correct?
Correct Answer

(B) Account receivable is credited

Explanation

Solution: When Account receivable is credited it is certain that a debt won't be recovered.

[#1368] The abnormal loss debited to:
Correct Answer

(A) profit & loss account

[#1369] Capital redemption reserve can be utilized for . . . . . . . .
Correct Answer

(C) issue of fully paid up bonus shares

[#1370] Debenture represents . . . . . . . . of the company.
Correct Answer

(C) loan