A-LevelAccountingPreparation of financial statements9706/12 · Feb/Mar 2016 · Q71 Mark
A business maintains a provision for doubtful debts of 5% per annum. It has trade receivables balances of $560000 at the start and $468000 at the end of the financial year. Which statements are correct? 1 Customers' accounts have been credited with $4600. 2 $4600 is treated as income in the income statement. 3 $4600 is deducted from current assets in the statement of financial position.
A1, 2 and 3
B1 only
C2 only
D2 and 3 only
✓ Correct answer
C: 2 only
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