Multiple choice

Provision for doubtful debts is

  1. debited to Sundry Debtors Account

  2. credited to Sundry Debtors Account

  3. debited to Bad Debts Account

  4. debited to Profit & Loss Account

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Provision for doubtful debts is created by debiting the Profit & Loss Account, which reduces the net profit. It is not directly debited to the Sundry Debtors Account or Bad Debts Account. The provision is shown as a deduction from debtors in the balance sheet.