Base for Calculating General Provision Steps:

• Start with total trade receivables balance.
• Subtract irrecoverable debts, which are written off as uncollectible.
• Subtract existing provision for specific doubtful debts, covering known risky accounts.
• Apply a percentage rate to the remaining net balance for the general provision.

Why D is correct:

• Accounting standards (e.g., IAS 39 or equivalent) require the general provision to be a percentage of trade receivables net of irrecoverable debts written off and specific provisions for individually impaired debts.

Why the others are wrong:

• A: Subtracts only irrecoverable debts, ignoring specific provisions and overstating the base.
• B: Subtracts only specific provisions, ignoring irrecoverable debts and using wrong base.
• C: Subtracts only irrecoverable debts, failing to exclude specific provisions from the base.

Final answer: D