Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 11 - No. 33)
What effect do uncollectible debts written off have on the net profit?
Increase
Decrease
No impact.
It depends on the value of the debts.
Explanation
Writing off an uncollectible debt does not affect net profit because it’s already accounted for as an expense in the provision for doubtful debts.
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