Journal Entry for Increasing Provision for Doubtful Debts

Steps:

• Identify the purpose: Increasing the provision requires crediting the Provision for Doubtful Debts account to raise the liability.
• Determine the debit: The offsetting entry debits an expense account, often summarized as Income Statement or Bad Debts Expense.
• Match to choices: Look for the entry that credits Provision for Doubtful Debts by $250.
• Select the correct format: Choice C specifies the provision account correctly for the credit side.

Why C is correct:

• Per accounting standards (e.g., IFRS 9 or GAAP), increasing a provision debits expense and credits the Provision for Doubtful Debts account directly.

Why the others are wrong:

• A: Debiting Customer reduces receivables, not provisions; incorrect for doubtful debts adjustment.
• B: Income Statement is debited for expense, but lacks the credit to Provision; incomplete entry.
• D: Identical to C but listed separately; likely a formatting error, making C the intended valid option.

Final answer: C