1
A provision for doubtful debts is created
(A) When debtors become bankrupt
(B) When debtors cease to be in business
(C) To provide for possible bad debts
(D) To write-off bad debts.
2
A company starts in business on 1 January 2006. You are to write up the vans account and
the provision for depreciation account for the year ended 31 December 2006 from the information
given below. Depreciation is at the rate of 25 per cent per annum, using the basis that one complete
month’s ownership needs one month’s depreciation.
2006 Bought two vans for £8,300 each on 1 January
Bought one van for £8,640 on 1 September