Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

A business sets up a provision for doubtful debts equal to 10% of trade receivables. The provision at 31 March 2018 stood at $8300. The trade receivables after deducting the provision on 31 March 2019 were $55800. By how much did the provision change over the year?

  • A$2100 decrease
  • B$2100 increase
  • C$2720 decrease
  • D$2720 increase

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