NABTEB Book Keeping 2015 Objective — Question 11
Question 11 of 40 from the National Business and Technical Examinations Board (NABTEB) Book Keeping 2015 Objective paper, with the correct answer and a full explanation.
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The effect of a reduction in the provision for doubtful debts is a(n)
- A. decrease in gross profit
- B. increase in gross profit
- C. decrease in net profit
- D. increase in net profitCorrect
Explanation
A reduction in the provision for doubtful debts is credited to the profit and loss account, resulting in an increase in net profit.
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