Which account acts as a 'contra' account to Gross Debtors in the Balance Sheet? MCQ with Answer and Explanation

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Which account acts as a 'contra' account to Gross Debtors in the Balance Sheet?

A. Discount Allowed Account

B. Sales Return Account

C. Provision for Doubtful Debts Account

D. Bad Debts Account

Answer: Option C

Solution (By JKSSB Mock Tests)

Provision for doubtful debts has a credit balance and is deducted from the debit balance of Debtors, acting as a contra-asset.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

Under the Straight Line Method of depreciation, the amount of depreciation:

A. Fluctuates based on usage

B. Increases every year

C. Decreases every year

D. Remains constant every year

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Correct Answer: Option D

Explanation:
SLM calculates depreciation on the original cost, resulting in the same amount being charged each year.

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Question #2

The 'Investment Property' (Ind AS 40) is measured initially at:

A. Fair value

B. Replacement value

C. Cost

D. Net realisable value

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Correct Answer: Option C

Explanation:
Initial measurement is at cost; subsequently either cost model or fair value model.

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Question #3

A and B are partners sharing profits 3:2. C is admitted for 1/5th share, which he acquires equally from A and B. The new profit-sharing ratio is:

A. 4:3:2

B. 5:3:2

C. 3:2:1

D. 9:6:5

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Correct Answer: Option B

Explanation:
A's new share = 3/5 - 1/10 = 5/10, B's new = 2/5 - 1/10 = 3/10, C's = 2/10. Ratio 5:3:2.

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