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An increase in provision for bad debt will ?

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Question added by Ahmed Hassanin CMA , Financial Planning and Controlling Manager , Methode Electronics
Date Posted: 2015/07/04
Vaiyapuri Gopalakrishnan
by Vaiyapuri Gopalakrishnan , Manager - After Sales , M/s Saud Bahwan Automotive llc

An increase in provision for bad debt will  - (A. Decrease net income)

Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Options A and D are the right answers.

Wasim khan wazir
by Wasim khan wazir , Finance Specialist , Mott Macdonald

It will decrease net income option A correct answer..................,,

Wodeya David
by Wodeya David , Administrative Assistant , Tumewoks investments Ltd

It will decrease the net income since it is subtracted from the gross profit as an operating expense

Waqas Shahid
by Waqas Shahid , Payable Accountant , Schlumberger

Option A, Since it is charged to Statement of Comprehensive Income and this will reduce net income.

lakshminarasimham mallareddi
by lakshminarasimham mallareddi , Manager Finance & Accounts , M/s. Vandana Global Limited, Raipur, Chhattisgarh

Correct Answer is D) Increase liabilities. An increase in provision means increase liabilities.

Michael Lagunday
by Michael Lagunday , Accountant , Dubai Camel Racing Club

The answer is A. Decreases net income.

 

Increase in provision of bad debt could be recorded using debit to bad debt expense (doubtful accounts) and credit to either Allowance for bad debts or Accounts receivable depending on the method used in recording such transactions.

It will give two effect...the one is decrease net income as an provision expensed...and another is increase your liability...(or directly deducted from trade debtors)...

G M Masudur Rahman
by G M Masudur Rahman , Manager Accounts & Finance , Noman Group of Industries

Decrease net Income

 

jawwad ahmed khan
by jawwad ahmed khan , Executive Manager , Ernst & Young

increase in bed debt expense can Decrease net income

Option A) decrease net income

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