Chapter 7 - Financial Statements Of Sole Traders

Question 1

Income Received In Advance

Answer 1

Money received by a business as income but that relates to the next financial period

Question 2

Income Due

Answer 2

Money that should have been received by a business from a receivable relating to the current financial period but that is yet to be received.

Question 3

True and Fair View

Answer 3

The principle that accounting records should be factually accurate wherever this is possible, or otherwise present a reasonable estimate of, or judgement about, the financial position

Question 4

Provision for Doubtful Debts

Answer 4

An amount set aside from profits to take account of the likelihood that some debtors will not be able to pay the amount due

Question 5

Bad Debt Recovered

Answer 5

An amount received from a receivable that has previously been written off