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Cash received from previous years allowance

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Cash received from previous years allowance

  • This topic has 5 replies, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • July 3, 2020 at 12:47 am #575781
    lchen
    Member
    • Topics: 17
    • Replies: 15
    • ☆

    Hello John, may I ask if we received cash which has been treated as allowance from previous year, can we debit allowance for receivables account and debit irrecoverable and doubtful expense account for T accounts?
    Thank you!

    July 3, 2020 at 10:07 am #575805
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    No, because then you would have two debits.

    What you can do is debit the allowance account and credit the expense account.

    However it is a bit inefficient and it is better simply to simply decide what change in the allowance is needed (taking into account the cash received as well as any other necessary changes) and then just to put through one entry. I do explain what I mean by this in my free lectures.

    July 3, 2020 at 11:37 am #575817
    lchen
    Member
    • Topics: 17
    • Replies: 15
    • ☆

    Oh sorry there is a typo I didn’t notice, what I mean is to credit the irr. and doubtful accounts, is that what you mean credit expense?

    Many thanks for your reply!

    July 3, 2020 at 3:35 pm #575839
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    Yes – that is what I mean 🙂

    July 4, 2020 at 1:02 am #575878
    lchen
    Member
    • Topics: 17
    • Replies: 15
    • ☆

    Thank you sir!

    July 4, 2020 at 11:28 am #575927
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘Cash received from previous years allowance’ is closed to new replies.

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