Accounting for IGCSE & O level - Accounting Procedures (Section 10 - No. 46)
What is the impact on the statement of financial position for excluding an irrecoverable debt?
Reduce draft profit by $300
Reduce trade receivables by $300
Increase draft profit by $300
Reduce non-current assets by $300
Explanation
The draft profit is overstated because the irrecoverable debt of $300 wasn’t written off
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