Chapter Eight- Irrecoverable Debts and Allowance for Doubtful Recievables

Question 1

Allowance for Doubtful Receivables

Answer 1

An amount that will be deducted from the RLCA balance in the statement of financial position to reduce the balance for amounts that are possibly irrecoverable

Question 2

Allowance for Doubtful Receivables - Adjustments

Answer 2

The account used to record the setting up and then adjustments of the allowance for doubtful receivables

Question 3

Doubtful Receivables

Answer 3

Amounts over which there is some doubt as to their recoverability

Question 4

General Allowance

Answer 4

An allowance set up as a percentage of the receivables balance to reflect the fact that on average a certain percentage of receivables will be doubtful

Question 5

Irrecoverable Debt

Answer 5

A debt that is believed will not be paid

Question 6

Irrecoverable Debts Expense Account

Answer 6

The expense account used to record the irrecoverable debts that are written off- the balance appears as an expense in the statement of profit or loss