Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Recording payment of irrecoverable and doubtful debts
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John Moffat.
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- March 5, 2016 at 6:34 am #303517
Dear Sirs,
Regarding lecture of Chapter 8 (on Video ‘F3studio ch8c Irrecoverable debt’), I wish to ask you for help clarify this matter:
When Cilla had made sales on credit of $261,000 and had received cash from customers of $238,000, you debit Receivables account with $261,000 and credit Receivables account with $238,000.
However, I think, of the $238,000 cash received, there is a fund which was not generated from the outstanding Receivables that we are recording for this month. ($2,200 from Paul).
Therefore, is it fine or possible that I would record like this?
– First, I calculate the money that is paid for the outstanding Receivable:
$238,000 – $2,200 = $235,800Then I Credit Receivables account with $235,800 (instead of $238,000)
– Secondly, I also treat the $2,200 as negative expense items, and record it as follows:
Debit Cash a/c $2,200
Credit Irrecoverable and doubtful debs expenses a/c $2,200Thank you very much!
Sincerely,
Phuong
March 5, 2016 at 10:09 am #303552That’s fine (and ends up with the same end result, which is all that matters).
However in real life it is common for the bookkeeper to do what I did in the lecture (because the bookkeeper is less likely to understand about irrecoverable debts being recovered) and it is therefore the accountant who will need to sort it out and put it correct.
March 5, 2016 at 11:42 am #303583Thank you very much!
March 5, 2016 at 2:56 pm #303611You are welcome 🙂
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