Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 15 - No. 37)
An increase in the provision for doubtful debts will have which of the following effects on the financial statements of the business?
Increase the value of trade receivables and reduce profit
Decrease the value of trade receivables and reduce profit
Increase the value of trade receivables and increase profit
Decrease the value of trade receivables and increase profit
Explanation
An increase in the provision for doubtful debts reduces the value of trade receivables and reduces profit.
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