A-LevelAccountingPreparation of financial statements9706/12 · Feb/Mar 2021 · 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
C: increase by $875
Practise more questions on this topic
Oracle Prep sorts past-paper questions by topic, so you can drill Preparation of financial statements and see which topics are most likely to come up next.
Sign up free →