Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 6 - No. 41)
What is the role of the provision for doubtful debts?
To increase the value of trade receivables.
To estimate the amount of uncollectible receivables.
To reduce the value of assets.
To record a debt which will not be collected.
Explanation
The provision estimates and reflects the amount of trade receivables that are unlikely to be collected.
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