A provision for discount on debtors is calculated on: MCQ with Answer and Explanation

A provision for discount on debtors is calculated on:
A. Debtors less Bad Debts less Provision for Doubtful Debts
B. Gross Debtors
C. Debtors less Bad Debts
D. Total Sales
Answer: Option A
Solution (By JKSSB Mock Tests)
Discount is only offered to good debtors. Thus, it is calculated on the debtor balance remaining after deducting bad debts and provision for doubtful debts.

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Practice More Accountancy and Book Keeping Questions

Question #1
Cash Flow Statement as per AS 3 classifies activities into:
A. Operating, Investing, and Financing
B. Revenue and Capital
C. Current and Non-current
D. Direct and Indirect

Correct Answer: Option A


Explanation:
AS 3 requires classification into operating, investing, and financing activities.

Question #2
Social Accounting is also known as:
A. All of these
B. Environmental accounting
C. Green accounting
D. Social responsibility accounting

Correct Answer: Option A


Explanation:
Social accounting encompasses reporting on social, environmental, and ethical impacts, often termed social responsibility accounting, environmental accounting, or green accounting.

Question #3
S1: Revaluation Account is prepared at the time of admission of a partner. S2: Revaluation Account is prepared at the time of retirement of a partner. Which statement(s) is/are correct?
A. S1 only
B. Neither S1 nor S2
C. S2 only
D. Both S1 and S2

Correct Answer: Option D


Explanation:
A Revaluation Account is prepared whenever there is a change in the constitution of the firm, including admission, retirement, or death of a partner, to adjust the values of assets and liabilities. Both statements are correct.