CMA Foundation Dec 2026 | Paper 2 FFCA — Bad Debts & Provision for Bad Debts ALL MCQs Solved

MA Foundation December 2026 students — this video covers ALL MCQs on Accounting Treatment of Bad Debts and Provision for Bad & Doubtful Debts (PFBD) from Paper 2 (FFCA), solved one by one with clear reasoning for each option. 📌 What's covered in this video: ✅ Bad Debts vs Doubtful Debts — the difference and accounting treatment ✅ Provision for Bad & Doubtful Debts (PFBD) — journal entries and calculation ✅ Bad Debt Recovery — where it's recorded and closed ✅ Provision for Discount on Debtors — calculation basis ✅ Opening vs Closing provision — how to find the P&L figure (debit/credit) ✅ Balancing figure technique to find bad debts written off ✅ Which accounting principle governs bad debts (Prudence) ✅ Free downloadable PDF with all solved MCQs 🎯 PFBD calculations are a guaranteed scoring area in CMA Foundation FFCA once you master the account format — this video walks through every calculation pattern the institute repeats. 📥 FREE PDF DOWNLOAD: Link available in the description box below and pinned as the first comment. 💬 Got doubts on any question? Drop them in the comments — I'll help you out. ⏱️ TIMESTAMPS: 0:09 Intro — Bad Debts & PFBD MCQs 0:18 Bad Debts — Which Account is Debited 0:44 Provision for Bad & Doubtful Debts — Credit Entry 1:06 Doubtful Debt Realized — Which Account Credited 1:45 Good Debtors vs Doubtful Debtors 2:33 Debtor Account in Balance Sheet 2:42 Bad Debt Recovery in Subsequent Period 2:55 Amount Debited When Bad Debt less than Opening Provision 3:35 Basis for Provision for Discount on Debtors 3:56 Where Bad Debt Recovery is Credited 4:42 P&L Amount Calculation — Opening/Closing Provision 5:17 Provision for Discount Calculation Example 6:02 Finding Bad Debt as Balancing Figure 7:57 Journal Entry to Write Off Bad Debt 8:18 Bad Debt Recovery — Effect on Net Income 8:32 Provision for Discount — Full Calculation Basis 9:12 Accounting Principle Behind Bad Debts (Prudence) 👉 Subscribe for more CMA Foundation Paper 2 FFCA chapter-wise MCQ solving, free study material, and exam strategy. --- 🔗 Useful Links: Free PDF (Bad Debts & PFBD MCQs Solved): [link in description/pinned comment] Full ICMAI Question Bank Playlist: Must Do Kit For December 2026: ❓ FREQUENTLY ASKED QUESTIONS Q1. What is the journal entry to write off a bad debt? A. The entry is: Bad Debts Account Debit, To Debtor Account. The loss from non-realization of a credit sale is debited to the Bad Debts account. Q2. What is the difference between bad debts and doubtful debts? A. Bad debts are an actual, confirmed loss — money that will definitely not be received. Doubtful debts are a probable loss — debtors we have doubts about but haven't confirmed as unrecoverable yet. Q3. Where is bad debt recovery recorded? A. Bad debt recovery is credited to the Bad Debt Recovery account, which is later closed to the Profit & Loss account as income, since it increases net income. Q4. How is the amount debited or credited to P&L for provision for bad debts calculated? A. Take the opening provision for bad debts, add the bad debts actually written off during the year, and compare with the closing provision required. The balancing figure is debited or credited to P&L. Q5. On what amount is the provision for discount on debtors calculated? A. Provision for discount on debtors is calculated on the debtors' balance after deducting any further bad debts written off and after deducting the provision for doubtful debts — not on the gross debtor balance. Q6. Which accounting principle governs the recording of bad debts and provisions? A. Bad debts and provisions are recorded based on the Prudence (Conservatism) principle, which requires that anticipated losses be recorded even if not yet certain. Q7. Are provisions for bad debts internal or external transactions? A. Provisions are internal transactions — they are accounting adjustments made within the business based on estimates, not transactions with outside parties. Q8. How do you find the amount of bad debts written off if only opening and closing provision figures are given? A. Bad debts written off can be calculated as the balancing figure: Opening Provision + Amount debited to P&L − Closing Provision required = Bad Debts Written Off. #CMAFoundation #FFCA #BadDebts #CMAFoundationDecember2026