Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 34 - No. 43)
When a debt is written off as irrecoverable, what impact does this have on the balance sheet?
Trade receivables increase, and cash decreases.
Trade receivables decrease, and cash increases.
Trade receivables decrease, and the provision for doubtful debts increases.
Trade receivables decrease, and the provision for doubtful debts decreases.
Explanation
When a debt is written off, it decreases trade receivables and reduces the balance of the provision for doubtful debts account.
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