O-LevelAccountingAccounting proceduresOct/Nov 2023Paper 1 Q181 Mark
Imran maintains a provision for doubtful debts of 5% of the trade receivables at the end of each financial year. The balance on his provision for doubtful debts account on 1 January 2022 was $700. Trade receivables on 31 December 2022 owed $2000 more than they owed on 31 December 2021. How did the change in the provision for doubtful debts affect the profit for the year ended 31 December 2022?
A$100 decrease
B$100 increase
C$800 decrease
D$800 increase
✓ Correct Answer
The correct answer is A: $100 decrease
📋 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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