Accounting Fundamentals

Allowance for receivables

A provision for debts that may not be collected.

An estimate of receivables unlikely to be collected, deducted from trade receivables and charged to profit or loss.

Passende Übungsfragen

☝️ Single Trade receivables at the year end are £80,000. Management estimates that 3% will not be collected. The allowance for receivables at the start of the year was £1,500. What is the charge to profit or loss for the year?
£1,500
£900
£3,900
£2,400
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