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Hi sir,
I don’t quite understand the answer of BPP kit 11.14. The choice C says that receivables are included in the statement of financial position net of the receivables allowance, which the answer says it’s correct. However, as per my understanding, the receivables allowance should show separately from receivables, and if it’s correct, this statement should be wrong. Could you please help, sir. Thank you so much!!
The receivables are shown net of the allowance, but there must be details of the receivables and of the allowance for receivables separately. The details can either be shown on the face of the SOFP or can be shown as a note to the accounts.
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