MCQ
State whether the following statement is True or False.
Discount allowed to debtors is called as bad debts.
Options
True
False
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Solution
False
Explanation: The amount that is not recoverable from the debtors is termed as bad debts. It is a loss for the firm. On the other hand, discount may be allowed to debtors in case of early payment.
Concept: Effects of Adjustments-Bad and Doubtful Debts
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