Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 40 - No. 3)
Which of the following statements is/are true regarding the impact of increasing a provision for doubtful debts?
It reduces the value of trade receivables on the balance sheet.
It increases the expense on the income statement.
It increases the profit on the income statement.
It increases cash in the balance sheet.
Explanation
Increasing the provision reduces the net value of trade receivables, and the expense is recorded on the income statement, which decreases profit.
Comments (0)
