Which One of the Following Is the Correct Statement

question 8

Multiple Choice

Which one of the following is the correct statement?

• A) There is no difference between bad debts and doubtful debts
• B) Bad debts will be received in the long term while doubtful debts will be received in the short term.
• C) A doubtful debt is unlikely to be received and has to be provided for.
• D) If a business has written off all known bad debts, it will never need to create a provision for doubtful debts.

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Definitions:

Gift Inter Vivos

A gift made voluntarily and without consideration during the giver's lifetime, distinct from a testamentary gift made through a will.

Contemplation of Death

A legal principle referring to actions or decisions made by an individual who expects to die soon, especially in creating or amending a will.

Uniform Transfers

Legal mechanisms designed to standardize the transfer of various types of assets or rights across different jurisdictions.

Custodian

A custodian is a person or organization that has responsibility for or takes care of something, such as managing and safeguarding assets.