AFIOTR Basic

Trade receivables refer to

• credit customer who still owe business money

• goods sold to customer on cash basis

• supplier of goods

• debts owing to supplier

What's the double entry to record creation of AFIOTR?

• Dr Trade receivable, Cr AFIOTR

• Dr Impairment loss on TR, Cr AFIOTR

• Dr AFIOTR, Cr Trade receivable

• Dr AFIOTR, Cr Impairment loss on TR

AFIOTR refer to

• customer who has paid back the money to business

• credit customer who still owe business money

• estimated trade receivables who are likely to be uncollectible

• credit customer who has gone bankrupt

What's the double entry to record cheque received from trade receivables ?

• Dr Trade receivable, Cr Cash at bank

• Dr Cash at bank, Cr Trade receivable

• Dr Cash at bank, Cr Sales revenue

• Dr Cash at bank, Cr Inventory

What's the double entry to record increase in AFIOTR?

• Dr Trade receivable, Cr AFIOTR

• Dr Impairment loss on TR, Cr AFIOTR

• Dr AFIOTR, Cr Trade receivable

• Dr AFIOTR, Cr Impairment loss on TR

What's the double entry to record decrease in AFIOTR?

• Dr Trade receivable, Cr AFIOTR

• Dr Impairment loss on TR, Cr AFIOTR

• Dr AFIOTR, Cr Trade receivable

• Dr AFIOTR, Cr Impairment loss on TR

What's the double entry to write off of the debt of a credit customer who has gone bankrupt?

• Dr Trade receivable, Cr AFIOTR

• Dr Impairment loss on TR, Cr AFIOTR

• Dr AFIOTR, Cr Trade receivable

• Dr AFIOTR, Cr Impairment loss on TR

What's the double entry to record increase in AFIOTR?

• Dr Trade receivable, Cr AFIOTR

• Dr Impairment loss on TR, Cr AFIOTR

• Dr AFIOTR, Cr Trade receivable

• Dr AFIOTR, Cr Impairment loss on TR

Which accounting theory/theories explain the need to have Impairment loss on trade receivables?

• Consistency theory

• Matching theory

• Prudence theory

• Accounting entity theory

On 31 Dec 2019, the AFIOTR of JY trading was estimated at 5% of $2000. On 31 Dec 2020, the AFIOTR was estimated at 5% of $3000.

Calculate the impairment loss on trade receivables for the year ended 31 Dec 2020.