ACCA Receivables and Bad Debts — practice questions
18 free MCQs with worked solutions. Tap any question for the answer + explanation, or practice them all in the app.
Practice ACCA Receivables and Bad Debts in the app →What does a write-off of a customer's account represent, and when is it appropriate?Which statement correctly matches each method of recording irrecoverable debts to the type of business that usUnder the direct write-off method, a company decides a $3,000 customer balance will never be received. What enUnder the direct write-off method, a customer who owes $3,000 pays $1,000 and the rest will never be collectedUnder the direct write-off method, a $3,000 balance was written off, then the customer unexpectedly returns toUnder the allowance method, what is the nature of the Allowance for receivables account?Under the allowance method, when is the Irrecoverable debts expense account used?Under the allowance method, a $3,000 customer balance is judged fully uncollectible. What entry writes it off?Under the allowance method, a customer owing $3,000 pays $1,000 and the remaining $2,000 is uncollectible. WhaReceivables total $97,000 and the Allowance for receivables stands at $12,000. What is the net realisable valuUnder the analysis-of-receivables approach, what figure should the year-end adjusting entry produce?An analysis of receivables estimates $8,000 of bad debt for the year. The Allowance for receivables has no balAn analysis of receivables estimates $8,000 of bad debt for the year. The Allowance for receivables already haAn analysis of receivables estimates $8,000 of bad debt for the year. The Allowance for receivables carries a Under the percent-of-sales method, credit sales last year were $400,000 and 2% are expected to default. The AlUnder the percent-of-sales method, credit sales were $400,000 with a 2% default rate, and the Allowance for reWhich difference correctly distinguishes the analysis-of-receivables method from the percent-of-sales method wOn the balance sheet, where do the Accounts receivable and Allowance for receivables amounts come from?