Accounting – 4.4 Irrecoverable debts and provision for doubtful debts | e-Consult

Question 1

ABC Company uses the indirect method to deal with doubtful debts. During the year, a review of the accounts receivable revealed that £12,000 of debtors were deemed uncollectible. The existing provision for doubtful debts was £1,500. Prepare the following:

• A journal entry to record the adjustment to the provision for doubtful debts.
• A ledger account for the provision for doubtful debts.