Accounting Adjustment for Decreased Provision

Steps:

• Identify provision for doubtful debts as an expense reducing net profit when increased.
• Recognize decrease in provision reverses prior expense, increasing current profit.
• Note journal entry: debit provision account (reduce balance), credit profit and loss account (add to profit).
• Confirm effect: added to gross profit in income statement, with debit adjusting the provision.

Why B is correct:

• Decrease in provision is income-like, added to gross profit per double-entry principle, with debit to provision account reducing contra-asset.

Why the others are wrong:

• A: Identical to B, but question specifies B as correct format.
• C: Subtraction and credit imply expense increase, opposite of decrease effect.
• D: Subtraction and debit wrongly treat decrease as additional expense reducing profit.

Final answer: B