What Entries Should Be Made in the Extended Trial Balance

question 12

Multiple Choice

What entries should be made in the extended trial balance in respect of a confirmed bad debt?

• A) Debit the income statement and credit the asset account
• B) Debit the income statement and debit the asset account
• C) Credit the income statement and credit the asset account
• D) Credit the income statement and debit the asset account
• E) None

---

Definitions:

Credit Sale

A transaction where goods or services are provided to a customer with the agreement that payment will be made at a future date.

Return

The income generated from an investment, or the act of returning goods to the seller for a refund or exchange.

Terms

Conditions and agreements under which something is provided or is to be provided, detailing the rate, quantity, and period.

Perpetual Inventory System

An accounting system that continuously records the quantities and values of inventory on hand and sold, updating records in real-time.