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

Preparation of financial statements — practice question

The extract below is taken from a business’s trial balance as at 31 May 2017. trade receivables: $72000$ provision for doubtful debts: $3250$ One customer, who owes $5000$, has been made bankrupt. The provision for doubtful debts is to be kept at $5\%$ of trade receivables. Which figure should be shown in the financial statements at 31 May 2017?

  • Aincome statement (expense): $3350$ expense; statement of financial position (current assets): $63650$
  • Bincome statement (expense): $3350$ expense; statement of financial position (current assets): $66900$
  • Cincome statement (expense): $5100$ expense; statement of financial position (current assets): $63650$
  • Dincome statement (expense): $5100$ expense; statement of financial position (current assets): $66900$

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