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JAMB Principles of Accounts 2010 Question 17

Question 17

Bad Debts and Provisions

Sundry debtor ₦20,000
Provision for bad debts ₦500
Provision for bad debt at 4% of sundry debtors.
Calculate the provision to be taken to the balance sheet.

  1. A.₦780
  2. B.₦800
  3. C.₦1200
  4. D.₦200
Show the answer and explanation

Answer: B (₦800)

Explanation

The balance sheet shows the full new provision: 4% × 20 000 = ₦800.