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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!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.
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!
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