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March 2025 ACCA Exam Results

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  1. First of all, thank you for the lectures, they are extremely helpful!

    I have been stuck on the 3312 part of the video… I understand we need to decrease allowance to get the value of 9248, but after that, you only said Dr allowance and Cr Irrecoverable on the video. I don’t really understand the logic behind this? Is it because we are increasing the value of asset of the business so we are decreasing the irrecoverable? Plus, on the accounting entry, 6488 can only be found if I made the right entries…

    • We are not changing the amount of the receivables themselves – we are reducing the allowance by debiting the allowance (which increases the value of the net receivables). We are making a ‘saving’ by reducing the allowance which is why we credit irrecoverable debts expense – it reduced the net expense for the period.

  3. In example 3 you didn’t include Micks $6000 Doubtful debt into the total amount to be posted to the SOPL, and you included all of the doubtful debt amounts in example 2.

  6. Please explain for me why there aren’t any entries to record transaction c). Maybe we admit this is a doubtful debt so we won’t change anything in receivable account, if not I think we should record Cr receivable account: 2,000 ?

    • In part (a) of the question we credited receivables with the total cash received of 238,000.
      This amount includes the 2,000 received from Ann (as it says in the note at the end of the question).

      • Thank you John but I have another question:
        In ACCA text 2016-2017, when irrecoverable debt of last year is paid in this year, we wil record Dr Cash & Cr Irrecoverable debt expense instead of Dr Receivable like your lecture, it just combine 2 entry : Dr Rec/Cr Expense & Dr cash/Cr Recei ?

      • If you listen carefully I explain this in the lecture. The entry should have been debit cash and credit irrecoverable debts expense. But because the bookkeeper had credited receivables by mistake, we need to correct the mistake.

  7. So when doubtful, we’ll just assume that they will pay. In example 2 and 3, where Ann is doubtful, so we dont have to change anything in the receivables account because we know she is doubtful debt?

  8. For Ques 3…i dont understand how there are 2 bal of 74,000 dr and 97,000 cr.which one is the balancing figure.I can understand a credit sales of 261,000 and cash received 238,000.Please help?

  9. Just a general comment. Ideally, there would have been one more example with plain reversals. Without cash already paid ( for the previously irrevocable debt) so its easier to see everything.
    I had to read 2 other books to get the idea. Considering this is Fin Acct 101 it seemed unnecessarily complicated.

    Gifted horse and all 馃檪 Thank you for doing these. When I become a partner in accounting firm I will donate half of my first paycheck

      • My problem was not with any double entry, but with the addition of cash payment which we have to reverse before we do the other ” ordinary entries” for receiving the payments. The basic concept gets muddled in the details ( of this already received cash)
        Anyway, it may it was just my experience, I could be fine for other people.

        Thanks again for these

  10. Dear Mr. John,

    Why the only increase or decrease in the allowance
    goest into the income statement/profit and loss account?

    For example, why should we take out existing allowance of the last year?
    I thought allowances are a separate item each year..

    • The allowance at the end of each year is based on the receivables at the end of the year. The allowance of the previous year is no longer needed.
      So you either remove the old allowance and create the new allowance, or (more efficiently) you just change the old allowance by whatever is needed to get the new allowance.

      • On the increase and decrease in the allowance for debts and bad debts,when they increase why do we only record the difference in increase because the previous bad debts account doesn’t relate to the current ?

  11. Dear tutor,

    I do not understand how the debt of Ann is treated (Example 3, part c).
    I have read the responses about this issue you have given to other students.
    But what I could not get is why we did not make an adjustment at the balance of allowances from the last year (totaling: 12,560)? As we know that there is still included the amount of Ann’s debt of 2,000 to come to this figure of 12,560.

    Thank you in advance!
    B

  12. Wacko had a receivable allowance at January 2000 of CU 1,000.He calculates that at 31 December 2000 a receivables allowance of CU 1,500 is required.In addition CU 2,000 of Debts were written off during the year, which includes CU 50 previously provided for.
    How much should be included in Wacko’s income statement in relation to irrecoverable debts for the year ended 31 December 2000 ?

    A. CU 1,500
    B. CU 2,450
    C. CU 2,500
    D. CU 2550
    Please waiting for your kind support !

    • Problem is below :
      In addition CU 2,000 of Debts were written off during the year, which includes CU 50 previously provided for.

      What is the meaning of includes CU 50 ? Is this mean the irrecoverable debts for the year (CU 2000 Less CU 50) = 1950 ? Or debts for the year CU 2000+ CU 50) = CU 2050 ? Or only CU 2000 ?

      Which is the Answer : (CU 500 + CU 1950) = CU 2450 ?
      : (CU 500 + CU 2050) = CU 2550 ?
      :(CU 500 + CU 2000) = CU 2500 ?

      Thanks for your patient!

    • You must ask this sort of question in the Ask the Tutor Forum, and not as a comment on a lecture.
      (But do not just expect an answer to a test question – you must have an answer in the same book in which you found the question, so you must ask about whichever part of the answer you are not clear about.)

  13. At 1 January 20脳1,there was an allowance for receivables of $3000.During the year ,$ 1000 of debts were written off as irrecoverable, and $ 800 of debts previously written off were recovered.At 31 December 20X1, it was decided to adjust the allowance for receivables to 5% of receivables which are $20000.

    What is the total receivables for the year?

  15. Recording the cost of changing, in the Allowance for receivables account makes perfect sense. But recording that same figure in the expense account isn’t making sense to me 馃檨

  16. The allowance for this year is 9248. We adjusted this allowance in our Allowance for receivables account by 3312 instead of removing the 12560 and than recording it, I get this part. What I don’t get is that we recorded 3312 in our Irrecoverable doubtful debt expense account. 3312 isn’t the actual allowance of this year it’s just a figure that we needed to adjust Allowance for receivables account. The actual allowance is 9248, why didn’t we record this figure in our expense account??

    • Because we already had an allowance and so we only need the cost of changing it.

      If you prefer then make two entries – one to remove the brought forward allowance which is no longer needed, and then a second one to create the allowance at the end of the year.

      The end result will be exactly the same in terms of the overall expense, but why make two entries when one will do 馃檪

      • Allowance is an expense, expenses are recorded in the year that they incur in. We recorded 12560 allowance in our expense account previous year. The expenses were recorded in that year’s income statemnet. Next year we open a new expense account, everything of the previous year is wiped clean, nothing was brought forward, expense account doesn’t have any connection with last year’s expenses. So this year’s allowance is 9248, recording the cost of changing it doesn’t make sense here.

      • You are completely wrong!!

        We recorded the expense when we first created the allowance. If the allowance is not needed in the following year (because, for example, a previously doubtful debt has paid) then since we cannot go back and change the previous year, we reverse the expense in the current year.

        Just as when a previous irrecoverable debt later pays. We had the expense of removing it in the year we decided it was irrecoverable. If it turns out that they end up actually paying in a later year, then again – we cannot go back and change the later year, but we record it in the year in which they paid.

        What I wrote before, and what is in the lecture is all completely correct!

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