O-LevelAccountingAccounting procedures7707/11 · Oct/Nov 2019 · Q121 Mark

Zafar maintains a provision for doubtful debts of 2% of trade receivables. On 1 January 2018 the provision was $200. On 31 December 2018 the trade receivables amounted to $12000. Which journal entry records the transfer to the income statement on 31 December 2018?

Aincome statement 40 provision for doubtful debts 40

Bincome statement 240 provision for doubtful debts 240

Cprovision for doubtful debts 40 income statement 40

Dprovision for doubtful debts 240 income statement 240

✓ Correct answer

A: income statement 40 provision for doubtful debts 40

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Topic: Accounting procedures, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2019 Paper 1 Variant 1, question 12.

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