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QN) A company has been notified that a customer has been declared bankrupt. The company had previously made an allowance for this debt. Which of the following is the correct double entry to account for this
new information?
DEBIT CREDIT
A Irrecoverable debts Receivables
B Receivables Irrecoverable debts
C Allowance for receivables Receivables
D Receivables Allowance for receivablesHello sir,
The question above is found in both the BPP kit and Kaplan kit but answers in both of them are different.
Kaplan says the answer is A
BPP says the answer is C
Pls can you help me understand which one is the correct one.
kind regards,
SukainaIt is really an unfair question (and therefore not likely in the exam) because either entry can be correct.
The easiest and most efficient way of dealing with it is A. I explain why (and the logic of both the entries) in my free lectures on irrecoverable and doubtful debts.
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