The following information relates to a firm whose policy is to maintain a provision for bad and doubtful debts equal to 5% of its debtors.
- Balances at 1 January
- Debtors £10,000
- Provision for bad and doubtful debts £500
- Transactions for the period 1 January to 31 December
- Credit sales £30,000
- Cash sales £5,000
- Receipts from credit customers £25,000
- Bad debts written off £1,000
The balance on the firm’s debtors control account at 31 December is?
Select ONE answer:
- £13,300
- £14,000
- £14,250
- £15.000
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 2
- Not correct
- Correct
- Not correct
- Not correct
Answer 2:
Neither the provision for bad and doubtful debts or the cash sales are relevant to the debtors control account
.
Debtors
Dr Balance b/d £10,000
Dr Sales (Credit) £30,000
Dr Totals £40,000
Cr Bank £25,000
Cr Bad Debts £1,000
Cr Balance c/d £14,000
Cr Totals £40,000
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