O-LevelAccountingAccounting procedures7707/11 · May/June 2023 · Q221 Mark

At the end of the financial year, Karim decided to increase his provision for doubtful debts. How will this affect his income statement and the statement of financial position?

Aincome statement: decrease expenses, statement of financial position: increase current assets

Bincome statement: decrease expenses, statement of financial position: increase current liabilities

Cincome statement: increase expenses, statement of financial position: decrease current assets

Dincome statement: increase expenses, statement of financial position: decrease current liabilities

✓ Correct answer

C: income statement: increase expenses, statement of financial position: decrease current assets

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Topic: Accounting procedures, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2023 Paper 1 Variant 1, question 22.

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