A-LevelAccountingThe accounting cycle9706/12 · May/June 2019 · Q71 Mark

The provision for doubtful debts at 1 January 2018 was $1580. Trade receivables at 31 December 2018 were $44750. This included a debt of $12500, considered irrecoverable. The provision for doubtful debts was to be maintained at a rate of 5%. Which entry for doubtful debts was included in the income statement for the year ended 31 December 2018?

A$32.50 expense

B$32.50 income

C$657.50 expense

D$657.50 income

✓ Correct answer

A: $32.50 expense

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Topic: The accounting cycle, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2019 Paper 1 Variant 2, question 7.

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