Irrecoverable debts and allowances

Question 1

what is the double entry for writing off a irrecoverable debt

Answer 1

DR irrecoverable debt expense
CR receivables

Question 1

it is prudent to remove irrecoverable debts from the account as they are no longer an…

Answer 1

asset

Question 2

what is the double entry for an irrecoverable debt being recovered

Answer 2

DR cash
CR irrecoverable debt expense

Question 3

why is an allowance for receivables balance created

Answer 3

• netted off against receivables to give a net figure for receivables which are probably recoverable

Question 4

true or false
irrecoverable debt does not change even if an allowance was originally in place for the debt

Answer 4

true

Question 5

true or false
allowance for receivables can only be adjusted at year end

Answer 5

true

Question 6

if we receive cash from our credit customer and we previously had an allowance for the debt, the double entry is..

Answer 6

DR cash
CR receivables

Question 7

if we write off our customers debt and we previously had an allowance for the debt, the double entry is..

Answer 7

DR irrecoverable debt expense
CR receivables

Question 8

if we write off a debt as irrecoverable and the debt is subsequently recovered, the double entry is

Answer 8

DR cash
CR irrecoverable debt expense