CIMA BA3 Irrecoverable Debts and Allowances (part c)

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1. joehesford says

   February 1, 2018 at 8:40 pm

   Hi John- Why when writing off Irrecoverable debts do we write off the sale value (expected Revenue) of the debt and not the Cost of sale value? Surely companies would rather write off the cost of sale value of the services they initially sold in order to minimise the expense they write off to the P&L?

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   • joehesford says

     February 1, 2018 at 8:46 pm

     Ignore me- they would have already recognised the cost of sale of the services/good sold in the P&L when they initially accrued the revenue. So is the write off of the irrecoverable debt just removing the previously accrued revenue/ receivable by stating it as an expense cost in a later period?

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     • John Moffat says

       February 2, 2018 at 7:56 am

       Correct