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A Company Has Been Informed That a Credit Customer Has

Question 12

Multiple Choice

A company has been informed that a credit customer has just been declared bankrupt, though it is probable that the customer's trade payables will get 50p for every pound outstanding, when the assets of his business are sold. The balance on his account was £1,000. Which of the following is the correct double entry to deal with this information?


A) Dr. Bad debts a/c £1000
B) Cr. Trade receivables a/c £1,000.
C) Dr. Bad debts a/c £500
D) Cr. Trade receivables a/c £500
E) Dr. Provision for doubtful debts a/c £1,000
F) Cr. Trade receivables a/c £1,000
G) Dr. Provision for doubtful debts a/c £500
H) Cr. Trade receivables a/c £500.

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