Practice Quiz

Forensic Accounting

Category - Specialized Forensic Knowledge

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How are bad debts accounted for?
  1. Added to the total receivables
  2. Subtracted from total receivables
  3. Added to share prices
  4. Added to general expense
Explanation
Answer: B - ‘Bad debts’ have their own accounting convention. These are subtracted from the total receivables to arrive at the net realizable value of all the receivables.
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