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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 the correct double entry?
i got this answer:
Dr Allowance and Cr Receivables
But the book says that the answer is
Cr Receivables Dr Irrecoverable Debts expense
Why?Following a mid-year review of its aged receivables’ listing, Pluto Co identified three
irrecoverable debts totalling $630 which should be written off. One of the debts, for $150,
was already included in the allowance for receivables.
What accounting entries should Pluto Co make to write off the irrecoverable debts?
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