1.1 If a business received a settlement discount from a creditor for paying their account off early, what would the accounting treatment of the discount be?

Select one:

a. Debit liability, credit expenses

b. Debit liability, credit income

c. Debit bank, credit income

d. Debit bank, credit expenses

1.2 What is the accounting treatment of writing off the debt of a customer who is no longer able to pay their outstanding account?

Select one:

a. Debit sales income; credit debtors control

b. Debit sales income; credit creditors control

c. Debit bad debts expense; credit creditors control

d. Debit bad debts expense; credit debtors control