O-LevelAccountingAccounting procedures7707/12 · May/June 2012 · Q141 Mark

Raminder maintains a provision for doubtful debts of 2½% of the trade receivables. On 1 January the balance on the provision account was $1075. The trade receivables at 31 December amounted to $41 000. Which entry will Raminder make on 31 December to adjust the provision for doubtful debts?

Aincome statement 50 provision for doubtful debts 50

Bincome statement 1025 provision for doubtful debts 1025

Cprovision for doubtful debts 50 income statement 50

Dprovision for doubtful debts 1025 income statement 1025

✓ Correct answer

C: provision for doubtful debts 50 income statement 50

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Topic: Accounting procedures, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2012 Paper 1 Variant 2, question 14.

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