Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 6 - No. 34)
What is the impact of increasing the provision for doubtful debts on trade receivables?
Increases the value of trade receivables.
Reduces the value of trade receivables.
Has no effect on the value of trade receivables.
Increases profit.
Explanation
As a business increases its provision for doubtful debts, the value of trade receivables decreases.
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