Chapter Nine: Irrecoverable Debts

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Last updated 10:45 PM on 9/28/26
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10 Terms

1
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What is the journal entry for Irrecoverable debts?

Dr IDE Cr TR

2
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What is the journal entry if an ID is paid?

Dr Cash Cr IDE

3
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Is an Allowance for Receivables a liability or an asset?

A liability

4
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What is the formula for Net Receivables?

Total Receivables - Allowance

5
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What is the journal entry to create an allowance?

Dr IDE Cr Allowance

6
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What is the journal entry to increase an allowance?

Dr IDE Cr Allowance

7
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What is the journal entry to decrease an allowance?

Dr Allowance Cr IDE

8
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How to approach an allowance question?

  1. Bring in b/f

  2. Write off ID

  3. Record the recovery of ID

  4. Close off the receivables ledger

  5. Calculate any Allowance movement

  6. Close off acounts


9
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How do I work out IDE SPL expense?

It is write offs - any ID that has been paid ± changes in allowance.

10
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Do I interfere with Allowance at all apart from increasing and decreasing it?

No