Accounting Multiple Choice Question – 5 March 2021

At the beginning of the year a business has a provision for doubtful debts of £2,600.

At the year end the provision is to be 5% of trade debtors. 

The balance on the Debtors Control account at the year end is £69,200, before writing off a bad debt of £480. 

The business operates a separate Bad Debts account.

What is the entry in the Profit and Loss Account for the provision for doubtful debts? 

Select ONE answer:

1. £836 debit
2. £860 debit
3. £836 credit
4. £860 credit

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 1

1. Correct – (£69,200 – £480) * 0.05 = £3,436 – £2,600 ==> £836 debit
2. Not correct
3. Not correct
4. Not correct

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