WAEC Accounting 2015 Objective — Question 22

Question 22 of 50 from the West African Examinations Council (WAEC) Accounting 2015 Objective paper, with the correct answer and a full explanation.

In preparing profit and loss account, a decrease in provision for doubtful debts accounts is treated as

A. Current liability
B. Expenses
C. IncomeCorrect
D. Current asset

Explanation

A decrease in the provision for doubtful debts means the business expects to recover more of its previously doubted debts, so it is treated as income (it increases net profit).

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