The provision for bad debt stands at 10% of debtors. How much is to be charged to profit and loss account as provision for bad debt?

Given:
………………………….Jan. 2003………Dec. 2003
Provision for bad debt……..N1000
Debtors……………………………………N20000
Bad debt to be written off…………………..N2000

A. N800
B. N1000
C. N1800
D. N2000

Correct Answer:

Option D – N2000