A-LevelAccountingThe accounting cycle9706/12 · May/June 2020 · Q91 Mark

A business provides the following information. [Table with 'trade receivables' $ and 'provision for doubtful debts' $ for 31 December 2018 ($46200, $1386) and 31 December 2019 ($48100, $1924)] Which statement must be correct?

AThe rate of provision for doubtful debts has decreased.

BThe rate of provision for doubtful debts has increased.

CThe value of irrecoverable debts incurred has decreased.

DThe value of irrecoverable debts incurred has increased.

✓ Correct answer

B: The rate of provision for doubtful debts has increased.

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Topic: The accounting cycle, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2020 Paper 1 Variant 2, question 9.

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