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I have a question.
a debt of 3000$ needs to be written off and an allowance for receivables needs to be adjusted to 2% of the remaining receivables balance.
It should be credit list of balances which is understandable but how can I credit it trade receivable control account?allowances can not be recorded in both control account.
maybe there is a key word which says a debt of 3000 needs to written off meaning irrecoverable debt?
what your explanation?Id a debt is written off then it means that it is irreoverable and is removed. It is removed from the list of balances but also needs removing from the control account by crediting the control account.
Sir your lectures are outstanding.But i have a doubt in irrecoverable and doubtful debts…….Sir are we recording the provisions for opening & closing balances of receivables balance????
For doubtful debts we no longer use the word provision – we call it the allowance for receivables and this is recorded in the allowance for receivables account.
Sir are we making provisions in the irrecoverable debts and doubtful debts account as opening and closing balances of provision by using the percentage given for allowance for receivables from opening and closing balances of receivables?
No – the provision is in the allowance for receivables account. The double entry for the changes needed in the allowance are made to the irrecoverable and doubtful debts expense account.
Have you watched my free lectures on this? The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
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