Provision for bad and double debts in companies final accounts is treated in?
Trading account
Profit and loss account
Fund flow statement
Cash flow statement
Correct answer is B
The Provision for Bad and Doubtful Debts will appear in the Balance Sheet. Next year, the actual amount of bad debts will be debited not to the Profit and Loss Account but to the Provision for Bad and Doubtful Debts Account which will then stand reduced.