Question：Doggard Co is a business that sells second hand cars. If a car develops a fault within 30 days of the sale, Doggard Co will repair it free of charge.
　　At 30 April 20X4 Doggard Co had made a provision for repairs of $2,500. At 30 April 20X5 Doggard Co calculated that the provision should be $2,000.
　　What entry should be made for the provision in Doggard Co's income statement for the year to 30 April 20X5?
　　A. A credit of $2,000
　　B. A charge of $500
　　C. A charge of $2,000
　　D. A credit of $500
　　The correct answer is: A credit of $500.
　　Doggard Co needs to reduce the provision by $500 ie a credit to the income statement.
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