Accounting 0452 · IGCSE · Irrecoverable debts and provision for doubtful debts

Irrecoverable debts and provision for doubtful debts — practice question

Julie’s books showed these balances on 1 July 2021: Trade receivables $64 200; provision for doubtful debts $1 284. On 30 June 2022, trade receivables were $58 500, and $500 of this amount needed to be written off as irrecoverable. Julie plans to keep her provision for doubtful debts at $2\%$ of trade receivables. What was the movement in the provision for doubtful debts at 30 June 2022?

  • A$114 decrease
  • B$124 decrease
  • C$376 increase
  • D$386 increase

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