Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 41 - No. 13)
How does increasing the provision for doubtful debts affect the current ratio (current assets / current liabilities)?
Increases the ratio.
Decreases the ratio.
No effect on the ratio.
Depends on other factors.
Explanation
The provision for doubtful debts does not affect current assets or current liabilities.
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