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 of 5% of trade receivables. At 1 January 2021, the provision stood at $800. By 31 December 2021, trade receivables were $13 400, including $600 that was considered irrecoverable. What was the provision for doubtful debts on 1 January 2022?

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

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