Chapter 9- Irrecoverable debt and allowances Flashcards
1
Q
Irrecoverable debt is a…
A
debt which the business believes will never be paid.
debt is expensed to SPL
2
Q
Indicators that a debt is irrecoverable
A
- Bankruptcy
- disappearance
- Outright refusal
3
Q
Double entry for irrecoverable debt
A
Dr irrecoverable debt expense (shown as a admin expense)
Cr Receivables
4
Q
Double entry to record a debt that is paid after its been written off
A
Dr Cash
Cr Irrecoverable debt expense
5
Q
Double entry for doubtful receivables
A
Dr irrecoverable debt expense
Cr Allowance for receivables
