➡️QUESTION⬅️

A business has a draft profit for the year of $182 750.

The following adjustments have not yet been made.

1 a decrease of $2800 in the provision for doubtful debts
2 a prepayment of rent by the tenant of $3900 at the year-end

What is the actual profit for the year?

A $176050
B $181650
C $183850
D $189450

ANSWER B


➡️QUESTION⬅️

A trial balance showed a provision for doubtful debts as $1350. Trade receivables were $50320
which included a debt of $500 which was irrecoverable.

Which entry was required in the provision for doubtful debts account if the closing balance was to be 5% of trade receivables?

A $1144 credit
B $1141 debit
C $1166 credit
D $1166 debit

ANSWER A


➡️QUESTION⬅️

The provision for doubtful debts at 1 January 2018 was $1580.

Trade receivables at 31 December 2018 were $44750. This included a debt of $12500, considered irrecoverable.

The provision for doubtful debts was to be maintained at a rate of 5%.

Which entry for doubtful debts was included in the income statement for the year ended 31 December 2018?

A $32.50 expense
B $32.50 income
C $657.50 expense
D $657.50 income

ANSWER A


➡️QUESTION⬅️

The draft financial statements of a business show a profit for the year of $64000 before taking
account of the following:

1 the reduction of the provision for doubtful debts by $300
2 the purchase of office stationery costing $2400 which has not been entered in the books; only one-sixth of this stationery was used by the year end.

What is the corrected profit for the year?

A $61900
B $63900
C $64100
D $64300

ANSWER B