A-LevelAccountingPreparation of financial statements9706/12 · Feb/Mar 2020 · Q81 Mark

A business makes a provision for doubtful debts equal to 10% of trade receivables. The provision at 31 March 2018 was $8300. The trade receivables after the provision on 31 March 2019 were $55 800. What is the change in the provision over the year?

A$2100 decrease

B$2100 increase

C$2720 decrease

D$2720 increase

✓ Correct answer

A: $2100 decrease

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Feb/Mar 2020 Paper 1 Variant 2, question 8.

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