At Year End Dodgy Ltd Had a Balance in Accounts

question 6

Multiple Choice

At year end Dodgy Ltd had a balance in Accounts receivable of $40 000 and an Allowance for doubtful debts of $2000.It was decided to write off as irrecoverable the debt of Houdini Ltd totalling $3500.It was further decided that the Allowance for doubtful debts should stand at 10 per cent of Accounts receivable.
- What was the journal entry needed to bring the Allowance for doubtful debts to the required level after writing off the debt of Houdini Ltd?

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Definitions:

Recumbent Position

A lying down position in which the individual is on their back, often used in medical and therapeutic settings.

Lateral Position

A body positioning technique where the patient lies on their side, often used in medical and therapeutic settings to improve comfort or access.

Physical Mobility

The ability to move the body freely and with ease, including walking, standing, and transferring from one position to another.

Respiratory System

The bodily system comprising organs and structures used for the process of respiration in an organism.