Question on: JAMB Accounting - 2015
Use the following information to answer this question.
Provision for bad debt 1500
Additional information
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Bad debt written off amount to 3000
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Debtors balance as at the end of the year is 28,000
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Provision for bad debts stand at 10%
How much is to be charged to profit and loss account as provision for bad debt?
A
N2, 800
B
N1, 000
C
N2, 500
D
N3, 000
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Correct Option: B
Being that debtors balance minus bad debt written off multiplied by 10% and subtracted from the initial provision
28000 – 3000 = 25,000 X 10% = 2500
:. 2500 – 1500 = 1,000 (increase in provisions)
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