Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 10 - No. 49)
What is the purpose of making a provision for irrecoverable debts?
To overstate a company's assets.
To match revenue with the related expense.
To reduce the company's tax liability.
To increase the value of accounts receivable.
Explanation
A provision for irrecoverable debts helps match revenue with expenses. It is designed to align with the accruals principle.
Comments (0)
