CIMA Fundamentals of financial accounting BA3 Question # 110 Topic 12 Discussion

CIMA Fundamentals of financial accounting BA3 Question # 110 Topic 12 Discussion

BA3 Exam Topic 12 Question 110 Discussion:
Question #: 110
Topic #: 12

In the year ended 31 December 20X1, XYZ receives an email confirming that a major customer has gone into liquidation and will be unable to pay its suppliers.

Which of the following is the impact of adjusting for this event?


A.

Profits increase and allowance increases.


B.

Receivables decrease and allowance increases


C.

Receivables unchanged and profits decrease


D.

Receivables decrease and profits decrease


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