The Existence of Bad Debts in trial balance signifies that the firm has already has incurred ________ arising from bad debts.

Profit

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Income

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Loss

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Expense

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Solution

The correct option is C Loss
The existence of bad debts in the trial balance signifies loss arising out of bad debts during the year and which has been already recorded in the books of account.

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Similar questions

A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debts omission?

The following balances appeared in the trial balance of M/s Kapil Traders as March 31, 2012.

Sundry debtors 30,500

Bad debts 500

Provision for bad debts 2,000

The partners of the firm agreed to records the following adjustments

in the books of the Firm. Further bad debts Rs 300. Maintain

provision for bad debts 10 $%$ . Show the following adjustments in

the bad debts account, provision account, debtors account, profit

and loss account and balance sheet.

10 %

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