Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 6 - No. 22)
What are the effects of a provision for doubtful debts?
Expense on the income statement
Decrease in the value of trade receivables
Decrease in owner's equity
Increase in the balance of the allowance for doubtful debts
Explanation
The provision is an expense and decreases the book value.
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