Correct Answer:
C. Bad debt expense is debited and accounts receivable is credited
The loss is recognized when the debt is identified as uncollectible.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
Under the direct write-off method, when a specific receivable is written off as bad:
Related MCQs
The Public Accounts Committee (PAC) mainly examines:
A.
Election disputes
B.
Foreign policy
C.
Appropriation accounts and audit reports of the Auditor-General
D.
Defense procurement plans before approval
Correct answer is:
C. Appropriation accounts and audit reports of the Auditor-General
Do you agree with this answer?
Contribution margin is calculated as:
A.
Sales minus fixed costs
B.
Sales minus total costs
C.
Gross profit minus selling expenses
D.
Sales minus variable costs
Correct answer is:
D. Sales minus variable costs
Do you agree with this answer?
Fund accounting is commonly used in the public sector because:
A.
Government has no assets
B.
All money is treated as one pool
C.
It avoids the need for budgets
D.
Resources are separated into funds according to purposes or legal restrictions
Correct answer is:
D. Resources are separated into funds according to purposes or legal restrictions
Do you agree with this answer?
Net income is Rs. 60,000 and shareholders' equity is Rs. 400,000. Return on equity (ROE) is:
A.
6.7%
B.
24%
C.
15%
D.
1.5%
Correct answer is:
C. 15%
Do you agree with this answer?
The key difference between fraud and error is that fraud is:
A.
An intentional act involving deception
B.
Always immaterial
C.
Always committed by outsiders
D.
Detected only by internal auditors
Correct answer is:
A. An intentional act involving deception
Do you agree with this answer?
The free-rider problem arises mainly in the case of:
A.
Private goods
B.
Luxury goods
C.
Public goods
D.
Inferior goods
Correct answer is:
C. Public goods
Do you agree with this answer?
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