Irrecoverable debts and provision for doubtful debts

A business keeps a provision for doubtful debts equal to 5% of trade receivables. The balance in the provision for doubtful debts account on 31 December 2018 was $2700. By 31 December 2019, trade receivables had risen to $50000. How is the provision for doubtful debts to be recorded on 31 December 2019?

Feb/March 2020

A trader entered the following in his ledger. Account debited: irrecoverable debts Account credited: Peter What transaction was being recorded?

Feb/March 2023

Julie’s books showed these balances on 1 July 2021: Trade receivables $64 200; provision for doubtful debts $1 284. On 30 June 2022, trade receivables were $58 500, and $500 of this amount needed to be written off as irrecoverable. Julie plans to keep her provision for doubtful debts at $2\%$ of trade receivables. What was the movement in the provision for doubtful debts at 30 June 2022?

Feb/March 2023

A business keeps a provision for doubtful debts equal to 5% of trade receivables. On 31 December 2018, the balance in the provision for doubtful debts account was $2700. By 31 December 2019, trade receivables had reached $50 000. How will the necessary adjustment to the provision for doubtful debts be recorded?

Feb/March 2024

A trader chooses to write off the amount still owed by a credit customer as an irrecoverable debt. A credit entry is recorded in the credit customer’s account and a debit entry is recorded in the irrecoverable debts account. Which accounting principles are being applied?

Feb/March 2024

At the close of year 1, a trader set up a provision for doubtful debts equal to $5\%$ of trade receivables. By the close of year 2, she chose to raise the provision to $6\%$. The trader gave the following figures: trade receivables at the end of year 1: $4800$ trade receivables at the end of year 2: $7500$ What amount for the provision for doubtful debts ought to be shown in the income statement for year 2?

Feb/March 2025

Why does a business keep a provision for doubtful debts account?

May/June 2021

As at $1$ April $2020$, Ahmed’s provision for doubtful debts was $\$290$. On $31$ March $2021$, the journal entry below was posted: Provision for doubtful debts debit $\$25$, income statement credit $\$25$. What amount of provision for doubtful debts was deducted from trade receivables in Ahmed’s statement of financial position on $31$ March $2021$?

May/June 2021

Shilpa’s financial year finishes on 30 April. On 31 March 2021, she wrote off a debt owed by Tahir as irrecoverable. Which journal entry was recorded by Shilpa on 31 March 2021?

May/June 2021

Shilpa’s financial year finishes on 30 April. On 31 March 2021, she treated a debt owed by Tahir as irrecoverable and wrote it off. Which accounting entry was recorded by Shilpa on 31 March 2021?

May/June 2021

Tej trades in goods on credit. His accounting year ends on 28 February. Tej gave the information below. At 1 March 2020 Trade receivables $6250 Other receivables (rent prepaid) $300 For the year ended 28 February 2021 Rent charge for the year $3900 Cheque payments for rent 30 June 2020 $1950 30 November 2020 $2100 At 28 February 2021 Trade receivables $7000 The provision for doubtful debts stood at 4% of trade receivables at 1 March 2020 and 6% of trade receivables at 28 February 2021.

May/June 2021

Tej is a trader who sells goods on credit. His year end is 28 February. Tej gave the following details. At 1 March 2020 Trade receivables $6250 Other receivables (rent prepaid) $300 For the year ended 28 February 2021 Rent charge for the year $3900 Cheque payments for rent: 30 June 2020 $1950, 30 November 2020 $2100 At 28 February 2021 Trade receivables $7000 The provision for doubtful debts was 4% of trade receivables at 1 March 2020 and 6% of trade receivables at 28 February 2021.

May/June 2021

Which of the following statements about a debts recovered account is accurate?

May/June 2022

Nula’s accounting year finishes on 31 December. She keeps a provision for doubtful debts equal to $5\%$ of trade receivables. At 1 January 2021, the provision was $800$. By 31 December 2021, trade receivables totalled $13400$, and $600$ of this was considered irrecoverable. What amount was shown for the provision for doubtful debts at 1 January 2022?

May/June 2022

Nula’s accounting year finishes on 31 December. She keeps a provision for doubtful debts of 5% of trade receivables. At 1 January 2021, the provision stood at $800. By 31 December 2021, trade receivables were $13 400, including $600 that was considered irrecoverable. What was the provision for doubtful debts on 1 January 2022?

May/June 2022

Nula’s financial year finishes on 31 December. She keeps a provision for doubtful debts equal to $5\%$ of trade receivables. On 1 January 2021, the provision stood at $800. By 31 December 2021, trade receivables were $13\,400$, and $600$ of this amount was considered irrecoverable. What amount was shown for the provision for doubtful debts on 1 January 2022?

May/June 2022

At the close of the financial year, Karim chose to raise his provision for doubtful debts. What effect will this have on his income statement and the statement of financial position?

May/June 2023

P Limited keeps a provision for doubtful debts account. On 1 April 2022, the balance on this account was $6200. The provision ought to have been raised to $7400 on 31 March 2023, but this adjustment was not entered. What effect did this error have on the retained earnings in the statement of financial position on 31 March 2023?

May/June 2023

On 2 January, Razia wrote off $450 that Annette, a credit customer, owed her as irrecoverable. On 2 October, Annette made a cheque payment of $100 towards settling part of that debt. Which entries would Razia record on 2 October?

May/June 2023

On 2 January, Razia treated $450 owed to her by Annette, a credit customer, as irrecoverable and wrote it off. Then, on 2 October, Annette paid $100 by cheque as part of that debt. What entries would Razia make on 2 October?

May/June 2023

Ramla has already worked out her draft profit for the year ended 28 February 2023. However, the following adjustments still need to be posted to Ramla’s ledger accounts. 1 An amount of $99 owed to Ramla by Mai is to be written off as irrecoverable. 2 Fixtures and fittings, $875, were purchased on credit from Padma. 3 A loan repayment, $500, had been incorrectly recorded as loan interest. 4 Rent paid, $350, had been recorded as $530. 5 Drawings, $120, had been debited to the wages account.

May/June 2023

Ramla has already worked out her draft profit for the year ended 28 February 2023, but her ledger accounts still need adjustments for these items; 1 Ramla is to write off $99 owed by Mai as irrecoverable; 2 fixtures and fittings costing $875 were bought on credit from Padma; 3 a loan repayment of $500 was wrongly entered as loan interest; 4 rent of $350 paid had been entered as $530; 5 drawings of $120 had been posted to the wages account.

May/June 2023

Why would a trader set up a provision for doubtful debts?

May/June 2024

Devendra prepared this journal entry: irrecoverable debts $714 (debit), Tobias $714 (credit). Which statement is correct?

May/June 2024

A company’s financial year finishes on 31 March. Trade receivables were $45\,000$ on 31 March 2021 and $41\,000$ on 31 March 2022. A bad debt of $1000$ has still not been written off at 31 March 2022. The provision for doubtful debts is to stay at $5\%$. What is the impact of the irrecoverable debt and the change to the provision for doubtful debts on the profit for the year ended 31 March 2022?

May/June 2024

Devendra made the journal entry below: Debit: irrecoverable debts $714 Credit: Tobias $714 Which statement is correct?

May/June 2024

A company’s financial year finishes on 31 March. At 31 March 2021, trade receivables amounted to $45\ 000$. At 31 March 2022, trade receivables amounted to $41\ 000$. An irrecoverable debt of $1000$ had still not been written off at 31 March 2022. The provision for doubtful debts is to remain at $5\%$. What effect will the irrecoverable debt and the change to the provision for doubtful debts have on the profit for the year ended 31 March 2022?

May/June 2024

A provision for doubtful debts equal to $5\%$ of trade receivables is kept. On 1 January 2024, the provision for doubtful debts account showed a credit balance of $240. By 31 December 2024, trade receivables amounted to $5200. It was decided that $200 of this amount could not be recovered. Which entry was recorded in the provision for doubtful debts account on 31 December 2024?

May/June 2025

For what reason would a trader treat money owed by a credit customer as an irrecoverable debt?

May/June 2025

Shilpa’s accounting year finishes on 30 April. On 31 March 2025, she wrote off a debt owed by Tahir because it was irrecoverable. Which entry did Shilpa record on 31 March 2025?

May/June 2025

Draft financial statements drawn up at the end of the first year of trading indicate: - draft profit for the year of $24\,000 - trade receivables of $6300. An amount of $200 is to be written off as irrecoverable. A provision for doubtful debts is to be established at $1\%$ of the trade receivables remaining. What will the revised profit for the year be?

May/June 2025

A provision for doubtful debts of 5% of trade receivables is kept. On 1 January 2024, the provision for doubtful debts account showed a credit balance of $240. By 31 December 2024, trade receivables totalled $5200. Of this, $200 was judged to be irrecoverable. Which entry was recorded in the provision for doubtful debts account on 31 December 2024?

May/June 2025

On 1 July 2019, Jason’s accounting records showed these balances: - trade receivables: $64\,200$ - provision for doubtful debts: $1284$ By 30 June 2020, trade receivables amounted to $58\,500$, and $500$ of this total was to be written off as irrecoverable. Jason wishes to keep his provision for doubtful debts at $2\%$ of trade receivables. What was the change in the provision for doubtful debts at 30 June 2020?

Oct/Nov 2020

Beena keeps a provision for doubtful debts equal to $3\%$ of trade receivables at the close of each financial year. On 1 September 2019, the provision for doubtful debts was $900$. By 31 August 2020, trade receivables had reached $42\,800$. Which journal entry was recorded by Beena on 31 August 2020?

Oct/Nov 2020

Jason’s book balances on 1 July 2019 contained the following items. Trade receivables amounted to $\$64\,200$. Provision for doubtful debts stood at $\$1284$. Trade receivables on 30 June 2020 were $\$58\,500$, and $\$500$ of this amount was to be written off as irrecoverable. Jason wishes to keep his provision for doubtful debts at $2\%$ of trade receivables. What was the adjustment in the provision for doubtful debts at 30 June 2020?

Oct/Nov 2020

Sally wanted to raise the balance on the provision for doubtful debts account at the close of the financial year. How ought this increase to be recorded?

Oct/Nov 2021

Farouk sells goods on credit. Khalid, who is a credit customer, gave a cheque that the bank later dishonoured. How should Farouk record this?

Oct/Nov 2021

Sally wanted to raise the balance in the provision for doubtful debts account at the close of the financial year. In what way should this increase be recorded?

Oct/Nov 2021

Once her income statement had been prepared, Emma found the following mistakes. A debt of $1500 ought to have been written off as irrecoverable. No adjustment had been recorded for Emma’s prepaid rent of $2800. The draft profit for the year came to $35. What was the corrected profit for the year?

Oct/Nov 2022

When her income statement had been completed, Emma identified the following errors. A debt of \$1500 ought to have been written off as irrecoverable. No adjustment had been recorded for rent prepaid by Emma of \$2800. The draft profit for the year was \$35000. What was the corrected profit for the year?

Oct/Nov 2022

Parker received cash from Alexi in settlement of a debt that had been written off as irrecoverable. How should Parker enter this in his accounts?

Oct/Nov 2022

Once Emma had prepared her income statement, she identified these errors. A debt of $1500 ought to have been written off as irrecoverable. No adjustment had been recorded for Emma's prepaid rent of $2800. The draft profit for the year amounted to $35000. What was the corrected profit for the year?

Oct/Nov 2022

NT began trading on 1 September 2020. Every sale is made on credit, and customers have to settle within 25 days. On 5 May 2021, LW, a trade receivable, was declared bankrupt and $600 was written off as irrecoverable at that time.

Oct/Nov 2022

PG is a trader in electrical components. She has supplied the following information for the year ended 31 July 2022. Sales journal $360000 Sales returns journal $13300 Trade receivables at 1 August 2021 $28500 Provision for doubtful debts at 1 August 2021 $1140 Cash book summary of totals for the year ended 31 July 2022: Discount allowed: Trade receivables $6500 Cash: Sales $17000 Bank: Trade receivables $335100 Bank: Trade receivables (dishonoured cheques) $4000 Further information: 1 $900 of trade receivables were written off as irrecoverable debts on 31 July 2022. No other irrecoverable debts arose during the year. 2 The provision for doubtful debts is to be fixed at 4% of trade receivables at 31 July 2022.

Oct/Nov 2022

NT began trading on 1 September 2020. Every sale is made on credit, and customers must pay within 25 days. On 5 May 2021, LW, a trade receivable, was declared bankrupt and $600 was written off as irrecoverable on that date. Besides the irrecoverable debt from LW, further irrecoverable debts of $4100 were written off in the year ended 31 August 2021. Trade receivables at 31 August 2021 were $91500 and NT chose to set up a provision for doubtful debts at 5% of trade receivables. In the financial year ended 31 August 2022, PB, a trade receivable owing $7000, had been declared bankrupt. On 17 July 2022, NT received a cheque for $2500 in full settlement of the debt. The rest of the debt was written off as irrecoverable. Other irrecoverable debts of $8400 were written off at 31 August 2022. The remaining trade receivables at 31 August 2022 were $110000 and NT decided to keep the provision for doubtful debts at 5% of trade receivables. NT is worried about the rise in irrecoverable debts in the second year of trading. To cut irrecoverable debts, he plans to adopt one of the two options below. Option 1: To charge interest on all debts not paid within his standard terms of payment of 25 days. Option 2: To stop supplies to all customers who do not pay within his standard terms of payment of 25 days.

Oct/Nov 2022

Joseph sells goods on credit and keeps a provision for doubtful debts. He wishes to raise his provision for doubtful debts by $400. Which journal entry is used to show this increase in the provision for doubtful debts?

Oct/Nov 2023

Imran keeps a provision for doubtful debts equal to $5\%$ of trade receivables at each financial year-end. The opening balance on his provision for doubtful debts account on 1 January 2022 was $700. Trade receivables on 31 December 2022 were $2000 higher than the amount owed on 31 December 2021. What effect did the alteration in the provision for doubtful debts have on the profit for the year ended 31 December 2022?

Oct/Nov 2023

Ahmed supplied the information below: trade receivables at $1$ January $2022$: $15000$ for the year ended $31$ December $2022$: credit sales: $85000$ cash sales: $12000$ cheques received from trade receivables: $65000$ irrecoverable debts: $2000$ By what amount had trade receivables risen by the close of the financial year?

Oct/Nov 2023

Joseph sells goods on credit and keeps a provision for doubtful debts. He intends to raise his provision for doubtful debts by $400. Which journal entry records this increase in the provision for doubtful debts?

Oct/Nov 2023

Logan trades in goods sold on credit. His year end falls on 30 September. The following details are available. At 1 October 2022 Inventory $8400 Trade receivables $7500 Other receivables (rent prepaid) $820 For the year ended 30 September 2023 Rent charge for the year $4940 Bank payments for rent 1 December 2022 $2460 1 June 2023 $2490 At 30 September 2023 Inventory $8675 Trade receivables $8700 Other receivables $? Irrecoverable debts to be written off $325 The provision for doubtful debts is to be kept at 4% of trade receivables.

Oct/Nov 2023

Logan is a trader selling goods on credit, and his year end falls on 30 September. Logan has given the following details. At 1 October 2022: Inventory $8400 Trade receivables $7500 Other receivables (rent prepaid) $820 For the year ended 30 September 2023: Rent charge for the year $4940 Bank payments for rent: 1 December 2022 $2460; 1 June 2023 $2490 At 30 September 2023: Inventory $8675 Trade receivables $8700 Other receivables ? Irrecoverable debts to be written off $325 The provision for doubtful debts is to be kept at 4% of trade receivables.

Oct/Nov 2023

Which of the following statements about irrecoverable debts are correct?

Oct/Nov 2024

Which journal entry should be made to close the irrecoverable debts account at the end of the year?

Oct/Nov 2024

Once a trader had finished her year-end financial statements, she realised that an adjustment to decrease the provision for doubtful debts by $100 had been omitted. What effect did this mistake have on the trader’s statement of financial position?

Oct/Nov 2024

Which of these statements about irrecoverable debts are correct?

Oct/Nov 2024

Which statement correctly describes a provision for doubtful debts?

Oct/Nov 2025

AY Limited has supplied the performance data shown below for its last two years of trading. Every sale and purchase is made on credit and each carries a 30-day credit period.

Oct/Nov 2025