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Hi Mr John .
Why s” expense paid out of cash received from credit customers before banking ” on the CR side of receivable account ?
That should be DR expense – CR Bank/ Cash a/c ?It depends what other entries have been made and what the question required (and what information is given).
Certainly one entry must be Dr Expense account.
In total the Cr on the receivables account must be the total cash received (which is the cash banked plus the expense that was paid out of the cash)
The full question is
Opening receivable : 29.100
Cash received from Credit customer and paid into the bank :381600
Expense paid out of cash received from credit customers before banking :6800
Irrecoverable debts written off :7200
Refund from credit customers :2100
Contract payable : 9400
Cash sale : 112.900
Closing receivables : 38.600
The figure which should appear in Statement of Profit / LossMy workings is exactly like the book workings except the” expense paid out ”
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I just keep redoing in the practice book so many times . but It seem never enough .
The more I practice , the more I get confused . There is new things anytime I try with new questions. And I’m just so worry .The total received from credit customers must have been 381,600 + 6,800, because 381,600 was paid into the bank but this was after paying out expenses of 6,800.
So it does not matter if you credit receivables with the total of 388,400, or whether you credit it with the two separate amount of 381,600 and 6,800. The end result is the same.
Appreciate, as I have told you before, that this exam is not all about debits and credits – there are always only a few questions that ask you for the debits and credits.
Have you watched all of our free lectures?
As far as your ‘practice book’ is concerned, is it from one of the ACCA approved publishers (so either the BPP Revision Kit, or the Kaplan Exam Kit)?
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