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chapter 8: irrecoverable debts and allowance for receivables
13 questions
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- 1. Multiple-choice2 minutes1 pt
an allowance for receivables of ยฃ4,000 is required at the end of a reporting period. the allowance for receivables brought forward from the previous period is ยฃ2,000. what's the impact of the profits?
increase by ยฃ4,000
decrease by ยฃ4,000
increase by ยฃ2,000
decrease by ยฃ2,000
- 2. Multiple-choice2 minutes1 pt
on 1 Jan 20x5 Plodd had an allowance for receivables ยฃ1,000. during 20x5, he wrote off debts of ยฃ600 and was paid ยฃ80 by the liquidator of a company whose debts had been written off completely in 20x4. at the end of 20x5 it was decided to adjust the allowance for receivables to ยฃ900. what is the net expense for irrecoverable debts in the P&L for 20x5?
ยฃ420
ยฃ580
ยฃ620
ยฃ780
- 3. Multiple-choice2 minutes1 pt
smith has receivables totalling ยฃ16,000 after writing off irrecoverable debts of ยฃ500, and he has an allowance for receivables brought forward of ยฃ2,000. He wishes to carry forward an allowance of ยฃ800.
what will be the effect on profit of adjusting the allowance?
ยฃ700 decrease
ยฃ700 increase
ยฃ1,200 decrease
ยฃ1,200 increase
- 4. Multiple-choice2 minutes1 pt
at 31 Dec 20x9 Folland's receivables totaled ยฃ120,000. Folland wishes to have an allowance for receivables of ยฃ3,600 which is 25% higher than it was before. during the year irrecoverable debts of ยฃ3,200 were written off and irrecoverable debts (written off three years previously) of ยฃ150 were recovered.
what is the net charge for irrecoverable debts for the 12-months reporting period ended 31 Dec 20x9?
ยฃ720
ยฃ900
ยฃ3770
ยฃ3,950
- 5. Multiple-choice2 minutes1 pt
during the reporting period ended 31 Dec 20x8 Keele decreased its allowance for receivables for ยฃ600. An irrecoverable debt written off in the previous reporting period amounting to ยฃ300 was recovered in 20x8.
if the profits after accounting for the above items is ยฃ5,000, what was it before the accounting for them?
ยฃ4,100
ยฃ4,700
ยฃ5,300
ยฃ5,900
- 6. Multiple-choice2 minutes1 pt
Bodkin had the following balances in its trial balance at 30 June 20x1:
trade receivables: ยฃ70,000
irrecoverable debts expenses: ยฃ500
allowance for receivables at 1 July 20x0: ยฃ5,000
Bodkin wishes to carry forward at 30 June 20x1 an allowance equal to 10% of trade receivables.
what is the irrecoverable debt expense in the P&L for the reporting period?
charge of ยฃ2,450
credit of ยฃ2,450
charge of ยฃ2,500
credit of ยฃ2,500
- 7. Multiple-choice2 minutes1 pt
Wacko had an allowance for receivables at 1 January 20x0 of ยฃ1,000. he calculates that at 31 December 20x0 an allowance for receivables of ยฃ1,500 is required. in addition of ยฃ2,000 of debts were written off during the reporting period.
how much should be included in the P&L in relation to irrecoverable debts expense?
ยฃ1,500
ยฃ2,450
ยฃ2,500
ยฃ2,550
- 8. Multiple-choice2 minutes1 pt
if a business has paid property tax of ยฃ1,000 for the year to 31 March 20x9, what is the prepayment in the financial statements for the 12-month reporting period ending on 31 December 20x8?
ยฃ0
ยฃ250
ยฃ750
ยฃ1,000
- 9. Multiple-choice2 minutes1 pt
on 5 May 20x8, Portals pays a rent bill of ยฃ1800 for the 18 months ended 30 June 20x9. what is the charge in the statement of profit or loss and entry for rent in the statement of financial position in respect of the 12 month reporting period ended 31 March 20x9?
ยฃ1200 with prepayment of ยฃ300
ยฃ1200 with accrual of ยฃ600
ยฃ1500 with accrual of ยฃ300
ยฃ1500 with prepayment of ยฃ300
- 10. Multiple-choice2 minutes1 pt
a firm made the following rent payments
ยฃ9000 for the 6 months ended 31 March 20x6
ยฃ12000 for the 6 months ended 30 September 20x6
ยฃ11196 for the 12 month ended 30 September 20x7
the charge to the statement of profit or loss for the 12 month. reporting period ended 31 December 20x6 was:
ยฃ13299
ยฃ19299
ยฃ24897
ยฃ22098
- 11. Multiple-choice2 minutes1 pt
Elizabeth paid ยฃ2500 for gas during the reporting period. At the beginning of the period she owed 500; at the end she owed ยฃ1000. what charge should have appeared in her statement of profit or loss for that reporting period?
ยฃ2000
ยฃ2500
ยฃ3000
ยฃ3500
- 12. Multiple-choice2 minutes1 pt
at the beginning of September Barney & Co were owed ยฃ200 in rent. at the end of September they were owed ยฃ400. ยฃ800 cash for rent was received during September.
what entry will be made in the statement of profit or loss for September for rent receivables?
debit ยฃ600
debit ยฃ1000
credit ยฃ600
credit ยฃ1000
- 13. Multiple-choice2 minutes1 pt
an irrecoverable debt arises in which of the following situations?
a customer pays part of the account
an invoice is in dispute
the customer goes bankrupt
a cheque received in settlement is dishonored by the customer's bank
