QS I GOT WRONG 8 Flashcards
4 Disaster plc’s trial balance shows trade receivables of £50,000. However, no adjustment has been
made for the following items.
(1) £3,250 from Crispin Ltd which has gone into liquidation. The amount is considered
irrecoverable.
(2) An increase in the allowance for receivables of £2,000.
(3) Cash received from Chaos Ltd of £2,500 which had previously been written off.
Requirement
What is the trade receivables account balance after posting the above adjustments?
A £50,500
B £50,200
C £46,750
D £49,250
10 At 1 May trade receivables were £31,475. During May, sales of £125,000 were made on credit.
Receipts from credit customers amounted to £122,500 and settlement discounts of £550 that were
not expected to be taken at the date of invoice were taken by credit customers. Credit notes of
£1,300 were issued to customers.
Requirement
What is the closing trade receivables balance at 31 May?
A £34,725
B £33,225
C £32,125
D £35,825
16 The following issues arose while Atkins Ltd was preparing its financial statements for the year to 31
8: Irrecoverable debts and allowance for receivables 51
(1) £350 was received in December 20X2 in respect of a debt which had been written off in the
previous year. The receipt was correctly included in the cash at bank account, but the
computerised accounting system was unable to match this transaction and posted the other side
of the entry to a suspense account.
(2) The directors determined that that the allowance for receivables should be reduced from £900
to £800 at the year end.