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:
- £6,080
- £6,400
- £7,220
- £7,600
Show your workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 4
- Not correct
- Not correct
- Not correct
- Correct – £30 / 0.05 = £600 so if £7,000 at 1 April then £7,600 at 31 March 2020
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