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

question 38

Multiple Choice

The allowance for doubtful debts account has a balance at the start of the year of $1000. At the end of the year debts of $990, including $90 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 $22 000 (including $2000 GST) . The amount for bad and doubtful debts appearing in the income statement for the year will be:

• A) $2000.
• B) $1900.
• C) $2100.
• D) $2200.

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