Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 44 - No. 10)
What does the provision for doubtful debts represent on a company's balance sheet?
The total amount of cash the company expects to collect.
The total amount of debts owed to the company.
An estimated amount of trade receivables that the company anticipates it will not collect.
The amount of cash the company has set aside for bad debts.
Explanation
The provision is the estimated amount of uncollectible receivables.
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