• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Opening allowance for receivables question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Opening allowance for receivables question

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 2, 2019 at 8:36 am #511031
    tayacca
    Participant
    • Topics: 12
    • Replies: 11
    • ☆

    Good Morning Sir, I hope you can clarify one thing for me please in relation to opening and closing allowance for receivables. I do understand the concept but some question do account for movement in allowance and some don`t.

    Allowance of 2% on 620,000 is 12,400 but my question is why are we not accounting for opening allowance which is 9,600 and record the movement instead of just taking 2%.

    At 30 September 20X9, the balance on the receivables control account is $644,000. The accountant is preparing draft financial statements and must make the following adjustments:
    (1) Write off debts totalling $24,000
    (2) Record a receipt of $12,000 in respect of a balance which had previously been written off as irrecoverable.
    (3) Make an allowance for receivables equivalent to 2% of trade receivables at 30 September 20X9. At 1 October 20X8, the allowance for receivables was $9,600.

    What amount should be recognised in current assets in respect of receivables in the statement of financial position at 30 September 20X9?
    Answer is 607,600.

    Many Thanks

    April 2, 2019 at 5:01 pm #511059
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    The question is asking for the statement of financial position, and it the SOFP we only show the receivables at the end of the year and the allowance for receivables at the end of the year.

    If the question has asked for an extract from the Statement of profit or loss, then you would have need to use the movement on the allowance – i.e. the cost of increasing the allowance over the year.

    I do suggest that you watch my free lectures on this. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.

    April 3, 2019 at 1:42 pm #511112
    tayacca
    Participant
    • Topics: 12
    • Replies: 11
    • ☆

    Many Thanks for your response Sir.

    April 3, 2019 at 4:03 pm #511129
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • mrjonbain on Presentation of financial statements – Example 1 (revision) – ACCA Financial Reporting (FR)
  • mohammedayan31 on Presentation of financial statements – Example 1 (revision) – ACCA Financial Reporting (FR)
  • John Moffat on The capital asset pricing model (part 2) – ACCA (AFM) lectures
  • John Moffat on Foreign exchange risk management (2) Part 1 – ACCA (AFM) lectures
  • zainab@24 on The capital asset pricing model (part 2) – ACCA (AFM) lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in