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.

Question

Quizplus · Accepted Answer

A doubtful debt is an amount that a company expects might not be paid by a debtor, and it is prudent to make a provision for such debts in the accounts.

Which One of the Following Is the Correct Statement