PRC-1 · Chapter 5 · Question 50 of 100
Which of the following directly REDUCES the 'Gross Trade Receivables' balance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Writing off an irrecoverable bad debt.
Explanation
Creating allowances (both general and specific) creates a contra-asset but does not change the gross receivables figure. Only a formal bad debt write-off physically credits and reduces the gross receivables ledger balance.
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