Question 14 The opening provision for doubtful debts was £2600 and the closing provision for doubtful debts is £2100. Which one of the following describes the effect (on profits and assets) of the closing provision for doubtful debts adjusting entry? Hide answer choices A Reduction in profits of £500 and an increase in assets of £500. B Reduction in profits of ES00 and a reduction in assets of £500. Increase in profits of ES00 and a reduction in assets of £500. Increase in profits of £500 and an increase in assets of £500.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question 14
The opening provision for doubtful debts was £2600 and the closing provision for doubtful debts is £2100.
Which one of the following describes the effect (on profits and assets) of the closing provision for doubtful
debts adjusting entry?
Hide answer choices
Reduction in profits of £500 and an increase in assets of £500.
Reduction in profits of E500 and a reduction in assets of E500.
Increase in profits of E500 and a reduction in assets of £500.
Increase in profits of £500 and an increase in assets of £500.
Transcribed Image Text:Question 14 The opening provision for doubtful debts was £2600 and the closing provision for doubtful debts is £2100. Which one of the following describes the effect (on profits and assets) of the closing provision for doubtful debts adjusting entry? Hide answer choices Reduction in profits of £500 and an increase in assets of £500. Reduction in profits of E500 and a reduction in assets of E500. Increase in profits of E500 and a reduction in assets of £500. Increase in profits of £500 and an increase in assets of £500.
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