Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 35 - No. 19)
Which statement best describes the relationship between the provision for doubtful debts and trade receivables?
The provision increases trade receivables.
The provision decreases trade receivables.
The provision has no effect on trade receivables.
The provision is trade receivables.
Explanation
The provision is deducted from trade receivables to arrive at the net realizable value.
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