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irrecoverable debt

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › irrecoverable debt

  • This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.
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  • March 14, 2020 at 9:38 am #565250
    ilham9089
    Participant
    • Topics: 301
    • Replies: 190
    • ☆☆☆

    Q: G Co has been notified that a customer has been declared bankrupt. G Co had previously made allowance for this receivable.
    Which of the following is the correct double entry?

    The answer says the double entry is DR Irrecoverable debts account CR Receivables Ledger control account.

    It says that G Co had previously made allowance for this receivable so shouldn’t the correct double entry be DR Allowance for Receivable CR Receivables Ledger Control Account, because if there is an allowance that means that the expense is already in the irrecoverable debt expense account so why does the answer say otherwise?

    March 14, 2020 at 5:31 pm #565262
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    In fact, as I explain in my lectures, you could debit either irrecoverable debts expense or you could debit the allowance (I explain the lectures why the end result would be the same).

    It is easier and more efficient to debit irrecoverable debts however.

    March 14, 2020 at 6:04 pm #565265
    ilham9089
    Participant
    • Topics: 301
    • Replies: 190
    • ☆☆☆

    Yes, I remember now. Thank you.

    March 15, 2020 at 2:22 pm #565281
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    You are welcome 🙂

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