NECO Accounting 2022 Objective — Question 16
Question 16 of 50 from the National Examinations Council (NECO) Accounting 2022 Objective paper, with the correct answer and a full explanation.
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An increase in provision for doubtful debts would result in
- A. decrease in gross profit
- B. increase in gross profit
- C. decrease in net profitCorrect
- D. increase in net profit
Explanation
Provision for doubtful debts is charged to the profit and loss account as an expense, so an increase reduces net profit (gross profit is unaffected).
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