Aug 27, 20211 min read

Business often create an allowance for doubtful debts

QUESTION 1

a) “Business often create an allowance for doubtful debts”.

(i) Explain the accounting concept related to the above statement.

(ii) What is the purpose of creating an allowance for doubtful debts?

(iii) How might the amount of an allowance for doubtful debts be calculated?

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