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

Irrecoverable debts and provision for doubtful debts — practice question

Nula’s accounting year finishes on 31 December. She keeps a provision for doubtful debts equal to $5\%$ of trade receivables. At 1 January 2021, the provision was $800$. By 31 December 2021, trade receivables totalled $13400$, and $600$ of this was considered irrecoverable. What amount was shown for the provision for doubtful debts at 1 January 2022?

  • A$600$
  • B$640$
  • C$660$
  • D$670$

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