A-LevelAccountingPreparation of financial statements9706/12 · Oct/Nov 2017 · Q71 Mark
The following information is available. [Table: provision for doubtful debts at the beginning of the year $6250, trade receivables at the end of the year $93750] Provision for doubtful debts is to be maintained at 6% of trade receivables. Which effect will the provision for doubtful debts have on profit for the year in the income statement?
Adecrease by $625
Bdecrease by $5625
Cincrease by $625
Dincrease by $5625
✓ Correct answer
C: increase by $625
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