Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 6 - No. 7)
Which of the following events will result in an increase in the provision for doubtful debts?
A customer pays off their outstanding balance.
A debt is written off as irrecoverable.
A new debt is deemed unlikely to be paid.
A bad debt is recovered.
Explanation
When a debt is deemed unlikely to be paid, the provision should increase.
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