Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 9 - No. 40)
What impact does a 'provision for doubtful debts' have on net profit and the statement of financial position?
Decreases net profit
Increases net profit
Reduces the value of accounts receivable on the statement of financial position.
Increases the value of accounts receivable on the statement of financial position.
Explanation
It is an expense which will decrease profit. The allowance account reduces the net amount receivable.
Comments (0)
