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Hi I would appreciate some help on the below:
A question lists a number of activities relating to the cash float including:
A cheque for $90 was cashed for an employee. I thought it was a trick inclusion but the 90 was credited to the account.
How is a cheque paid to an employee related to petty cash?
——————————————————————A question lists the opening and closing balance of
Receivables at year end for 2006 and 2007.
Sales
Total cash received
Specific allowance opening and closing
Irrecoverable debtsThe answer deducted the debt and the increase in the allowance first and included that number as the closing balance.
Would this always be the case? I though when they gave us the year end receivable for 2007 that that would be the closing balance.
The cheque was cashed for the employee. That means that the employee paid a check to the company (so the company received cash in the bank) and the company gave him cash in return (so the company had less petty cash).
I do not know what it was that your second question was actually asking for. The balance on the receivables account at the start of the year is the closing balance from the previous year. On the SOFP we show the receivables less the allowance for receivables.
Thank you! Your comment reminded me that the increase in the specific allowance is only included in the irrecoverable expense account and not reflected on the t account for receivables- only on the SOFP. Silly mistakes!
Thank you for your time!
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