Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 13 - No. 45)
A company has written off an irrecoverable debt. What is the immediate impact on the statement of financial position?
Increase in assets.
Decrease in assets.
Increase in liabilities.
No impact.
Explanation
Writing off a debt doesn't change total assets. It decreases trade receivables and the provision by the same amount.
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