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

Irrecoverable debts and provision for doubtful debts — practice question

Draft financial statements drawn up at the end of the first year of trading indicate: - draft profit for the year of $24\,000 - trade receivables of $6300. An amount of $200 is to be written off as irrecoverable. A provision for doubtful debts is to be established at $1\%$ of the trade receivables remaining. What will the revised profit for the year be?

  • A$23\,737
  • B$23\,739
  • C$23\,800
  • D$23\,939

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