Loss assets should be written off. If loss assets are permitted to remain in the books for any reason, ______percent of the outstanding should be provided for.

Question

Quizplus · Accepted Answer

If loss assets are permitted to remain in the books, 100% should be provided for. This means that the entire outstanding amount of the loss assets should be recognized as a loss and written off from the books. Option A (150%) is incorrect because it implies an overstatement of the provision. Option B (75%) is incorrect because it implies an understatement of the provision. Option D (50%) is also incorrect because it implies an inadequate provision for the loss assets.

Loss Assets Should Be Written Off