Question on: SS1 Accounting - Bad Debts And Provision For Bad Debts: Meaning

What is a provision for bad debts?

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A

A legal document that allows a business to recover its bad debts

B

An accounting entry that sets aside a portion of a company's revenue to cover potential future losses from bad debts

C

A loan that a business takes to cover its bad debts

D

A strategy that a business uses to avoid bad debts

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Correct Option: B

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