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Carlo had receivables of $598,600
Allowance were $12,460. She wished to change that to 2%
She received $635 in full settlement of a debt that she had written ofWhat amount should she recognised in the SOPL?
I have got 1,123 debit however in the BPP book it says 1,123 credit
Could you please tell me why it’s a credit?
A debit is an expense in the SOPL.
Here she is reducing the allowance which saves money, and has received money from a previously irrecoverable debt. Therefore it is a negative expense and therefore a credit.
Therefore, we debit the expense account by $1123 and credit SOPL by $1123??
Now I get the point.
One last thing. If we were asked which amount would appear in the SOFL for receivables and allowances, then what would be the figure?
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