Day: September 5, 2020

Alex maintains a position for doubtful debts at 5% of the accounts receivables at the end of each financial year. On 1 April 2020 the accounts receivables amounted to £7,000 and the provision for doubtful debts was £350.

The income statement for the year ended 31 March 2020 was debited with £30 for the provision of doubtful debts.

How much did the trade receivables owe on 31 March 2020?

Select ONE answer:

1. £6,080
2. £6,400
3. £7,220
4. £7,600

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £30 / 0.05 = £600 so if £7,000 at 1 April then £7,600 at 31 March 2020

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