At the close of Year 2, the total of trade receivables, before any deduction for the allowance for irrecoverable debts, was unchanged from the figure at the end of Year 1. No irrecoverable debts arose in either year. In Year 2, the sole trader lowered the allowance rate for irrecoverable debts. What effect does this action have on profit for the year and on current assets?
Accounting 9706 · AS & A Level · Reconciliation and verification