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What is the treatment of doubtfull (not irrecoverable!) debt (was allowed for in the previous petiod), which was subsequently paid?
Thanks!
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we will deduct from receivables an allowance for receivables equal to the amount of any doubtful debt so that the net left in in the financial statement is total receivables
Hi there,
As you know when treating the irrecoverable debts you make credit entry in the receivables account but with doubtful debts you don’t make any entry in the receivables account. This means when the doubtful debt is paid, the receivables account will be credited as the payment is received.
Hope it helps,
Regards,
Tammi
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