The Allowance for Doubtful Debts Account Has a Balance at the Start

question 29

Multiple Choice

The allowance for doubtful debts account has a balance at the start of the year of $2000. At the end of the year debts of $880, including $80 GST, are to be written off and the allowance for doubtful debts is to be adjusted to 10% of the closing accounts receivable balance of $33 000 (including $3000 GST) . The amount for bad and doubtful debts appearing in the income statement for the year will be:

• A) $3000.
• B) $1800.
• C) $1200.
• D) $3300.

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Definitions:

Purchase Aspect

The considerations and factors that influence a buyer's decision to acquire goods or services.

Trial Close

A sales technique where the seller asks a prospective buyer for feedback on a product or service before the final close.

Urgency Close

A sales technique that aims to expedite a decision from the buyer by emphasizing the limited availability of the offer, creating a sense of urgency.