Provisions and liabilities

The double entry is to debit the irrecoverable and doubtful debts expense account and credit the allowance for receivables account, with the increase in the allowance. The allowance (we do not call it provision) appears in the SOFP as a reduction in receivables - it is not a question of recognising it. 2) I do not know what you mean by 'utilising' the provision. If you mean that it is used to write off any specifically irrecoverable debts, then the best entry (as I explain in my lectures) is to Credit Receivables and Debit irrecoverable debts expense account (as always) and then to adjust the provision to the balance needed at the end of the year with the double entry being to the irrecoverable debts expense account. The provision at the end of the year appears on the SOFP as a reduction in receivables. 3) The remaining balance is $39,000 is increased to the balance required of $57,500 by crediting the provision with $18,500 and debiting the irrecoverable debts expense account with $18,500 which is the cost of increasing the provision. The expense of $18,500 appears in the SOPL as with all expense. All of this is explained in detail, with examples, in my free lectures on irrecoverable debts and allowances. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.