Accounting 9706 · AS & A Level · The accounting system

The accounting system — practice question

Usman started selling goods on credit on 1 January 2021. He keeps an allowance for irrecoverable debts at every financial year-end.
(a)[4]

Explain two accounting concepts that are applied in making an allowance for irrecoverable debts.

(b)[2]

State two factors that should be taken into account when choosing the percentage to use for an allowance for irrecoverable debts.

(c)[5]

Set out the allowance for irrecoverable debts account for 2022 and 2023.

(d)[4]

State the double-entry needed to record the following transactions: Writing off the account on 5 January 2024. The settlement of the amount due on 29 March 2024.

Worked solution & mark scheme

This 15-mark question has a full step-by-step worked solution and mark scheme. One marking point: An explanation of the matching/accruals concept

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