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Receivable

This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.

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March 13, 2021 at 11:58 pm #614374
sujit222
Participant
- Topics: 3
- Replies: 0
G co has been notified that a customer has been declared bankrupt. G co had previously made allowance for this receivable.
Which of the following is correct double entry?
A) Dr Allowance for receivable
Cr Receivable
B) Dr Irrecoverable debt
Cr Receivable
March 14, 2021 at 11:01 am #614402
John Moffat
Keymaster
- Topics: 57
- Replies: 54748
This should not really be asked in the exam because, as I explain in my free lectures, the correct end result can be achieved using either of the two entries.
However, if it is asked as a ‘one-off’ entry as here, then the entry to choose is the first one (A).
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