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What is a provision for bad debts - SS1 Accounting Bad Debts And Provision For Bad Debts: Meaning Question

What is a provision for bad debts?

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

correct option: b
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