alleryStart learning →A customer is declared insolvent after year-end, confirming a loss on his dues. What is the treatment?
AAdjust the receivable
BIgnore it completely
CShow a contingent gain
DDefer to next year
Answer & Solution
Correct answer: A. Adjust the receivable
The insolvency confirms a loss on a receivable that existed at the balance sheet date, so assets are adjusted.
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