O-LevelAccountingAccounting procedures7707/12 · May/June 2024 · Q251 Mark

A company's financial year ends on 31 March. On 31 March 2021 trade receivables were $45 000. On 31 March 2022 trade receivables were $41 000. An irrecoverable debt of $1000 is yet to be written off at 31 March 2022. The provision for doubtful debts is to be maintained at 5%. What is the effect of the irrecoverable debt and the adjustment to the provision for doubtful debts on the profit for the year ended 31 March 2022?

Adecrease $750

Bdecrease $800

Cdecrease $1200

Ddecrease $1250

✓ Correct answer

A: decrease $750

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Topic: Accounting procedures, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2024 Paper 1 Variant 2, question 25.

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