Accounting For End Of Period Adjustments: Irrecoverable Debts
Muhtasari
A provision for irrecoverable debts is never calculated from nothing more than once. After the first year, a business already has a provision sitting on its books, and the year-end job is to decide whether that provision needs to grow, shrink, or stay the same, based on this year's closing trade receivables.
In this lesson you will learn how to adjust an existing provision for irrecoverable debts at the year end, how an increase or a decrease is recorded and affects profit, and how the figures for irrecoverable debts and trade receivables are presented in the income statement and the statement of financial position.
Malengo
- Explain why it is necessary to provide a provision for irrecoverable debts
- Distinguish between an irrecoverable debt and a provision for an irrecoverable debt
- Calculate and record irrecoverable debts and provision for irrecoverable debts in the books of account
Maelezo ya Somo
Inapatikana kwenye programu ya Green Bridge
Pakua programu ya Green Bridge CBT kwenye simu yako au kompyuta yako ili kupata maelezo kamili ya masomo, maswali ya mazoezi, na mengi zaidi.
Tathmini ya Somo
Hongera kwa kukamilisha somo la Accounting For End Of Period Adjustments: Irrecoverable Debts. Sasa kwa kuwa umechunguza dhana na mawazo muhimu, ni wakati wa kuweka ujuzi wako kwa mtihani. Sehemu hii inatoa mazoezi mbalimbali maswali yaliyoundwa ili kuimarisha uelewaji wako na kukusaidia kupima ufahamu wako wa nyenzo.
Utakutana na mchanganyiko wa aina mbalimbali za maswali, ikiwemo maswali ya kuchagua jibu sahihi, maswali ya majibu mafupi, na maswali ya insha. Kila swali limebuniwa kwa umakini ili kupima vipengele tofauti vya maarifa yako na ujuzi wa kufikiri kwa makini.
Tumia sehemu hii ya tathmini kama fursa ya kuimarisha uelewa wako wa mada na kubaini maeneo yoyote ambapo unaweza kuhitaji kusoma zaidi. Usikatishwe tamaa na changamoto zozote utakazokutana nazo; badala yake, zitazame kama fursa za kukua na kuboresha.
- The required provision for irrecoverable debts rises from $500 to $700. What effect does this have on profit for the year? A) Increases profit by $200 B) Decreases profit by $200 C) No effect on profit D) Decreases profit by $700 Answer: B
- Trade receivables after write-offs are $20,000 and the provision policy is 5%. What is the required closing provision? A) $500 B) $1,000 C) $2,000 D) $4,000 Answer: B
- The provision for irrecoverable debts falls from $900 to $700. How is this recorded? A) Debit irrecoverable debts, credit the provision account B) Debit the provision account, credit irrecoverable debts C) Debit trade receivables, credit cash D) No entry is needed Answer: B
- What is deducted from trade receivables to find net trade receivables on the statement of financial position? A) The depreciation charge B) The closing provision for irrecoverable debts C) Capital D) Drawings Answer: B
- Opening provision for irrecoverable debts is $1,000. Required closing provision is $1,150. What amount is charged to the income statement? A) $1,000 B) $1,150 C) $150 D) $2,150 Answer: C
Inapatikana kwenye programu ya Green Bridge
Pakua programu ya Green Bridge CBT kwenye simu yako au kompyuta yako ili kupata maelezo kamili ya masomo, maswali ya mazoezi, na mengi zaidi.
Inapatikana kwenye programu ya Green Bridge
Pakua programu ya Green Bridge CBT kwenye simu yako au kompyuta yako ili kupata maelezo kamili ya masomo, maswali ya mazoezi, na mengi zaidi.
Vitabu Vinavyopendekezwa
Fanya Mazoezi ya Maswali ya Majaribio
Ungependa kufanya mazoezi ya maswali ya majaribio kuhusu Accounting For End Of Period Adjustments: Irrecoverable Debts? Pakua programu ya Green Bridge CBT ili kupata maswali ya majaribio na tathmini kamili za mazoezi kuhusu mada hii.
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