Irrecoverable Debts (Edexcel IGCSE Accounting: Introduction to Bookkeeping & Accounting): Exam Questions

Vijul provided the following information for the year ended 31 March 2023.

Vijul maintains a provision for irrecoverable debts at 5% of trade receivables.

Prepare the provision for irrecoverable debts account for the year ended 31 March 2023 showing the transfer to the income statement.

Provision for Irrecoverable Debts Account

State two ways in which Vijul can encourage his credit customers to pay their accounts promptly.

Explain one difference between an irrecoverable debt and a provision for irrecoverable debts.

Xi provided the following information at 1 May 2022

Calculate the rate of the provision for irrecoverable debts.

On 30 April 2023 trade receivables were $21500

An irrecoverable debt of $750 was to be written off.

Calculate at 30 April 2023:

(i) trade receivables

(1)

(ii) provision for irrecoverable debts.

(1)

(iii) Prepare the provision for irrecoverable debts account for the year ended 30 April 2023. Balance the account on this date and bring the balance down on 1 May 2023.

(4)

Provision for Irrecoverable Debts Account

Identify, indicating with a tick (✓), where the balance of each account would be shown in a statement of financial position.

State one way in which Xi could reduce his irrecoverable debts.

State one difference between an irrecoverable debt and a provision for irrecoverable debts.

Identify, indicating with a tick (✓), in which section of the financial statement each would appear.

At 30 September 2020 the balance of Rashida’s trade receivables ledger control account was $39 650. A debt of $730 due from Lee was irrecoverable.

Prepare a journal entry in Rashida's books to write off the irrecoverable debt. A narrative is not required.

Rashida maintains a provision for irrecoverable debts of 5% of trade receivables.

At 1 October 2019 the balance of the provision for irrecoverable debts account was $1 635.

Calculate the increase or decrease in the provision for irrecoverable debts at 30 September 2020.

State in which section of the statement of financial position the provision for irrecoverable debts would appear.

Identify where the balance of the irrecoverable debts account is transferred to at the year end.

Explain one reason why a business may find it necessary to make a provision for irrecoverable debts.

Complete the table below, indicating with a tick (✓) which account will be debited and which account will be credited when writing off an irrecoverable debt.

Nyan maintains a provision for irrecoverable debts of 5% of trade receivables.

On 1 March 2019 the balance of the provision for irrecoverable debts account was $1 845

On 29 February 2020 trade receivables were $42 520. This included $380 that Nyan considered to be irrecoverable.

Calculate the balance of the provision for irrecoverable debts at 29 February 2020.

Prepare the provision for irrecoverable debts account for the year ended 29 February 2020. Balance the account at this date and bring down the balance on 1 March 2020.

Provision for Irrecoverable Debts Account

Evaluate the reasons why it is necessary for a business to create a provision for irrecoverable debts.

Huang maintains a provision for irrecoverable debts at 4% of trade receivables. The balance of the provision at 1 November 2018 was $965

At 31 October 2019 the balance of Huang’s trade receivables ledger control account was $23 620 of which $170 was irrecoverable.

Calculate the balance on the provision for irrecoverable debts account at 31 October 2019.

Prepare the provision for irrecoverable debts account for the year ended 31 October 2019 showing the transfer to the income statement. Balance the account at this date and bring the balance down at 1 November 2019.

Provision for Irrecoverable Debts Account

Neha provided the following information for the year ended 31 March 2019.

Neha maintains a provision for irrecoverable debts at 10% of trade receivables.

At 31 March 2019 irrecoverable debts of $550 were to be written off.

Calculate the provision for irrecoverable debts at 31 March 2019.

Prepare the provision for irrecoverable debts account for the year ended 31 March 2019. Balance the account on that date and bring the balance down on 1 April 2019.

Provision for Irrecoverable Debts Account