PRC-1 · Chapter 10 · Question 76 of 100
When an entity prepares its financial statements, where should an 'Allowance for Doubtful Debts' be presented?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) As a deduction from Trade Receivables under Current Assets.
Explanation
The allowance for doubtful debts is a contra-asset account. It is presented in the Statement of Financial Position as a deduction from gross Trade Receivables to show the net realizable value.
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