A trader had trade receivables of 50,000 at the end of his accounting period. Trade receivables at the beginning of the period was 60,000. His policy is to make allowance for doubtful debts at the rate of 5%. State the change in value of the allowance for doubtful debts at the end of the current accounting period.
500 decrease in allowance
500 increase in allowance
2,500 decrease in allowance
2,500 increase in allowance
