Accounting · Provision for Doubtful Debts

Which of the following statements are correct regarding doubtful debts and the provision for them? I. Businesses estimate potential losses for doubtful debts based on experience, usually calculating it as a fixed percentage of total debtors at the end of the accounting period. II. The provision for doubtful debts is recorded on the credit side of the Profit and Loss Account to increase the current year's net profit. III. The provision is deducted directly from the amount of sundry debtors in the Balance Sheet, while the individual customer accounts in the debtors' ledger remain unaffected. IV. An excess balance in the provision for bad and doubtful debts account beyond actual requirements is debited to the Profit and Loss Account. Choose the correct answer from the options given below: