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

Irrecoverable debts and provision for doubtful debts — practice question

On 1 July 2019, Jason’s accounting records showed these balances: - trade receivables: $64\,200$ - provision for doubtful debts: $1284$ By 30 June 2020, trade receivables amounted to $58\,500$, and $500$ of this total was to be written off as irrecoverable. Jason wishes to keep his provision for doubtful debts at $2\%$ of trade receivables. What was the change in the provision for doubtful debts at 30 June 2020?

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

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