Irrecoverable Debts and Allowances Example 1 – ACCA Financial Accounting (FA) lectures
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thank you. What happens to the SOPL if we have already thought for example in year 2020 that Zplc was a doubtful debt of 2800 which means we added it in the expenses in 2020. But once they become irrecoverable say in year 2022, do we also add them again in expenses in year 2022?
From where do i get the question that’s been taught in this video?
In our free lecture notes as is stated at the beginning of every lecture!!
Click on ACCA in the top bar. Then click on FA in the new bar what appear. Then you will get a page linking to all of our free Paper FA study resources.
professor for how long can specific allowance stay on BS before it actually becomes an irrecoverable debt? Can a business drag it from one year to another, say for a decade?
There is no law, but they will not leave it for very long – either the debtor pays or they will decide that it is irrecoverable.
This helped me so much. Thank you!
Thank you John. You make it really understandable.
First class quality explained sir ??
Thankyou very much
Question mark was an emotican. Now wont use any, always converts to question marks.
Dear John
As we passed the accounting entry (Debit Irrecoverable debts expense and Credit Allowance for receivables). Since the Irrecoverable expense account appears in SOPL therefore it will automatically be closed as year ends. However, Allowance for receivables is SOFP account and it would not be closed by the year end. So in subsequent year, it will still be there as a opening balance. Am i getting anything wrong?
No – it will still be there, and as you will see in the next example we will adjust it as necessary at the end of the following year.
Hi,
That simply means, for the answers to be correct, the deducted amounts (bad debts+doubtful) should be same on both P&L and SFP as 9124$ here.
Correct,
Best,
Azzam
Thanks Mr. Moffat. I am understanding the topics much better.
Great content as always, however I have one Q, with all these examples are you referring to internal mgmt accounts or statutory accounts?
Thx
These lectures apply to the financial accounts (Paper MA examines internal management accounts).
It is limited companies that are required to produce statutory accounts (not sole traders) but the double entries involved are the same for both. The extra rules regarding the layout etc of the statutory accounts for limited companies are covered in a later chapter on limited companies.
thank you sir for the incredible content
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Dear John, many thanks for all of your lectures! You make it so easy, thank you sir!
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Very clear and easy to understand. Thank you, professor
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I can not watch the lecture.Why?
I do not know why, because the problem must be at your end. Ask in the technical support forum and admin may be able to help you.
Could be flash player or pop ups, allow them on your browser. No luck, try to watch them on you tube, but make sure they cover 2019 lecture notes.
opentuition is increadibly awesome
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