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Question : Writing off bad debts against the provision for doubtful debts; would result in inflow/outflow/no flow of Cash and Cash Equivalents:

Option 1: Inflow of cash

Option 2: Outflow of cash

Option 3: Neither inflow Nor outflow

Option 4: Cash and cash equivalent


Team Careers360 9th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: Neither inflow Nor outflow


Solution : Answer = neither inflow nor outflow of cash

If bad debt is written off against provision for doubtful debts would result in no flow of cash
Provision for doubt full debt A/ C Dr
To Bad debts A/c
Hence, the correct option is 3.

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