Receivables in the year-end accounts
Put it all together: write off, allow, then show trade receivables in the statement of financial position and the cost in profit or loss.
Task 1Write off first, then allow4 questions
The year-end work on receivables is done in a fixed order.
- Write off the debts that are irrecoverable
- Work out the allowance needed on the receivables that are left
- Post only the change in the allowance
| Account | Debit | Credit |
|---|---|---|
| Trade receivables | 32,400.00 | |
| Allowance for doubtful debts | 1,280.00 | |
| Irrecoverable debts expense | 240.00 |
The credit of £240 is the money recovered from Pedal Corner. Debts of £900 are now to be written off.
Task 2In the statement of financial position2 questions
Task 3In the statement of profit or loss3 questions