A-LevelAccountingAdjustments to Financial StatementsFeb/Mar 2021Paper 1 Q101 Mark
A sole trader maintains a provision for doubtful debts at 5% of trade receivables. Provision for doubtful debts at the start of the year was $2750. The following information is available at the end of the year. trade receivables $ 37 500 irrecoverable debts written off during the year 500 What is the effect on the profit for the year due to the change in the provision for doubtful debts?
Adecrease by $875
Bdecrease by $900
Cincrease by $875
Dincrease by $900
✓ Correct Answer
The correct answer is C: increase by $875
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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