- This topic has 5 replies, 2 voices, and was last updated 5 years ago by
.
- Posts
Hi John. Thanks again for your reply yesterday. I am still struggling on this question. For George what would the entry be? . I am debiting the allowance account and crediting the expense account. Would I have to credit the receivables account and debit the expense account again as it is irrecoverable? If you could show me a worked explanation that would really help. Hope to hear from you soon.
Hi John
I hope you can help me on this question still. Quite struggling on this question.
But I work through this example in the free lecture and explain how we deal with George. I hope that you are not using the lecture notes without watching the lectures because that would be pointless. The lecture notes are not a Study Text, they are lecture notes and it is in the lectures that I work through the examples and explain and expand on the notes. If you are not watching the lectures for any reason then you must buy a Study Text from one of the ACCA approved publishers and study from there.
When George becomes irrecoverable the entry is the same as for all irrecoverable debts – we debit the expense account and credit receivables.
There is no need for an entry in the allowance account. We simply will not include George when calculated the allowance required at the end of the period.
Thanks John. I have watched the lecture but the bit I don’t understand is when you say debit the allowance and credit the receivables account. What happens after is what I don’t understand. After the debit is entered do we work out the balance on the allowances account ?
- The topic ‘Irrecoverable debts’ is closed to new replies.