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in your lectures you said that irrecoverable debts are recorded on credit side of sales ledger control account i am very confused with a statement i tried to do it myself but i couldn’t sorry i am bothering you again.The statement is ”the allowance for irrecoverable debts is recorded in sales ledger control account” and this statement is wrong i don’t get it why it is wrong
Irrecoverable debts are removed completely and we do this by crediting the receivables control account and debiting the irrecoverable debts expense account.
Doubtful debts are not removed from receivables because they are only doubtful and we still hope to receive the money. Instead we credit the allowance for receivables account (I do not mention an allowance for irrecoverable debts account anywhere in my lectures, because there is no such account) and debit the irrecoverable debts expense account.
On the SOFP we show as a current asset the balance on the receivables account less the balance on the allowance for receivables account.
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