- 5 Marks
Question
At 1 August 2023, the balance on the allowance for receivables account was GH¢12,600.
At 31 August 2023, the company’s management decided that the revised balance should be 10% of the month-end accounts receivable.
Required:
Prepare the Allowance for Receivables and Irrecoverable Debt Expense accounts, showing the necessary entries for the financial period ending 31 August 2023.
Answer
Allowance for Receivables Account
| GH¢ | GH¢ |
|---|---|
| Write-back | 1,200 |
| Balance b/f (1 Aug 2023) | 12,600 |
| Balance c/f (31 Aug 2023) | 11,400 |
| Total | 12,600 |
Irrecoverable Debt Expense Account
| GH¢ | GH¢ |
|---|---|
| Irrecoverable debts written off | 5,400 |
| Write-back | 1,200 |
| Charge for the year | 4,200 |
| Total | 5,4 |
- Topic: Bad and doubtful debt
- Series: Nov 2024
- Uploader: Salamat Hamid