O-LevelAccountingVerification of accounting recordsOct/Nov 2017Paper 1 Q131 Mark
Ajay maintains a provision for doubtful debts of 3% of trade receivables. On 1 January 2016, the balance on the provision for doubtful debts account was $70. The trade receivables amounted to $3500 on 31 December 2016. Which entry did Ajay make on 31 December 2016?
Adebit bad debts account, credit provision for doubtful debts account
Bdebit income statement, credit provision for doubtful debts account
Cdebit provision for doubtful debts account, credit income statement
Ddebit provision for doubtful debts account, credit trade receivables account
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The correct answer is B. This question tests the candidate's understanding of verification of accounting records within the Accountingsyllabus. The examiner's mark scheme requires...
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