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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