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Allowance for doubtful debts

This topic has 1 reply, 2 voices, and was last updated 1 month ago by John Moffat.

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January 27, 2023 at 10:10 am #677460
Joanne94
Participant
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Hello John,
If a question says the receivables allowance is to be adjusted to 1.5% of the remaining balance, how would that be handled? Would the balance increase or decrease by the percentage?
Many thanks ?
January 28, 2023 at 9:02 am #677503
John Moffat
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- Topics: 56
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The allowance will be 1.5% of the final balance on the receivables account. Whether this requires an increase or decrease in the allowance depends on what the allowance balance brought forward was.
Have you watched my free lectures on this?
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