To Allow for Debts That Might Prove Bad in the Future

question 13

Multiple Choice

To allow for debts that might prove bad in the future, a business will recognise as an expense in the income statement:

• A)bad debts.
• B)doubtful debts.
• C)allowance for doubtful debts.
• D)allowance for depreciation.

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Definitions:

Owner's Capital Account

An equity account that represents the amount of money that the owner has invested in the business plus any profits or minus any losses.