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Amounts owing by customers amounted to £650,000 at 31 December 2020. The  business sets the provision for doubtful debts at 2.5% of trade receivables. The  provision for doubtful debts at 31 December 2020 amounted to £19,340. The final adjustment relating to doubtful debts in the accounts for the year ended 31 December 2020 will be: a) Dr Doubtful debts charge 16,250 Cr Trade receivables 16,250 b) Dr Doubtful debts charge 3,090 Cr Doubtful debts provision 3,090 c) Dr Doubtful debts provision 3,090 Cr Doubtful debts charge 3,090 d) Dr Doubtful debts charge 16,250 Cr Doubtful debts provision 16,250

Amounts owing by customers amounted to £650,000 at 31 December 2020. The  business sets the provision for doubtful debts at 2.5% of trade receivables. The  provision for doubtful debts at 31 December 2020 amounted to £19,340. The final adjustment relating to doubtful debts in the accounts for the year ended 31 December 2020 will be: a) Dr Doubtful debts charge 16,250 Cr Trade receivables 16,250 b) Dr Doubtful debts charge 3,090 Cr Doubtful debts provision 3,090 c) Dr Doubtful debts provision 3,090 Cr Doubtful debts charge 3,090 d) Dr Doubtful debts charge 16,250 Cr Doubtful debts provision 16,250

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Amounts owing by customers amounted to £650,000 at 31 December 2020. The 
business sets the provision for doubtful debts at 2.5% of trade receivables. The 
provision for doubtful debts at 31 December 2020 amounted to £19,340.
The final adjustment relating to doubtful debts in the accounts for the year ended 31
December 2020 will be:
a) Dr Doubtful debts charge 16,250 Cr Trade receivables 16,250
b) Dr Doubtful debts charge 3,090 Cr Doubtful debts provision 3,090
c) Dr Doubtful debts provision 3,090 Cr Doubtful debts charge 3,090
d) Dr Doubtful debts charge 16,250 Cr Doubtful debts provision 16,250

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