passwella.
Menu

WAEC Financial Accounting 2004 Question 18

Question 18

Bad Debts and Provisions

A decrease in the provision for doubtful debts results in

  1. A.an increase in net profit
  2. B.a decrease in gross profit
  3. C.an increase in gross profit
  4. D.a decrease in net profit
Show the answer and explanation

Answer: A (an increase in net profit)

Explanation

The reduction is credited to profit and loss, raising net profit.