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at the start of the year, joe had an allowance of 700 against receivables. during the year, of this amount, 450 went bad and 150 was received; the balance remained unpaid. a further debt of 170 went bad. at year end joe decided that an allowance for 340 was required?
In the solution they havent included the 150 received in any account?
shouldnt baddebt received be recorded?The entry for the cash received from the doubtful debt is Dr Cash Cr Receivables.
That is the only entry needed.
Do watch my free lectures on irrecoverable and doubtful debts – I specifically cover this point. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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