Day: October 26, 2021

A company has the following balances.

trade debtors at 31 December 2020  —  £125,400

provision for doubtful debts at 1 January 2020  —  £1,800

During the year ended 31 December 2020, bad debts of £20,500 were written off.

The company provides for 5% of trade debtors at each year end.

What is the doubtful debts expense for the year ended 31 December 2020? 

Select ONE answer:

1. £3,445
2. £4,470
3. £5,245
4. £6,270 

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

1. Not correct
2. Correct – £125,400 @ 5% = £6,270 – £1,800 = £4,470
3. Not correct
4. Not correct

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