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John Moffat.
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sujit222
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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 ReceivableB) Dr Irrecoverable debt
Cr Receivable
John Moffat
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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).
sujit222
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