A business created a provision for doubtful debts at 31 December 2016. The provision was calculated as a percentage of the trade receivables at each year end as follows.
year ended trade receivables $ provision for doubtful debts %
31 December 2016 32 500 10
31 December 2017 34 300 5
Which entry in the provision for doubtful debts account for the year ended 31 December 2017 was required?

Q: What topic does this question test?

This question tests Provisions for Doubtful Debts in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting May/June 2018 examination, Paper 1 Variant 2 (9706_s18_qp_12.pdf).

Question

A business created a provision for doubtful debts at 31 December 2016. The provision was calculated as a percentage of the trade receivables at each year end as follows.
year ended            trade receivables $          provision for doubtful debts %
31 December 2016    32 500                       10
31 December 2017    34 300                       5
Which entry in the provision for doubtful debts account for the year ended 31 December 2017 was required?

Oracle Prep · Accepted Answer

The correct answer is B: $1535 debit.

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