Accounting adjustments 1

What is an irrecoverable debt?

• A debt which might not be paid by the customer

• A debt which will be paid by the customer

• A debt which will not be paid by the customer

• A debt which has already been paid by the customer

What is a doubtful debt?

• A debt which might not be paid by the customer

• A debt which will be paid by the customer

• A debt which will not be paid by the customer

• A debt which has already been paid by the customer

What is a provision for doubtful debts?

• An estimate of the likely amount of a business's trade receivables that may become irrecoverable.

• The exact figure of a business's trade receivables which will become irrecoverable.

• The exact figure of a business's trade receivables which might become irrecoverable.

• An estimate of the likely amount of a business's trade receivables that will become irrecoverable.

The double entry for an irrecoverable debt is ...

• DR Trade receivables, CR Irrecoverable debt

• DR Irrecoverable debt, CR Trade receivables

• DR Trade receivables, CR Provision for doubtful debts

• DR Provision for doubtful debts, CR Trade receivables

The double-entry for an irrecoverable debt recovered is ...

• DR Bank, CR Irrecoverable debt

• DR Irrecoverable debt, CR Bank

• DR Bank, CR Irrecoverable debt recovered

• DR Irrecoverable debt recovered, CR Bank

If trade receivables are £10,000, how much will a 1% provision for doubtful debts be?

• £10,000

• £1,000

• £100

• £10

If the provision for doubtful debts moves from £320 to £400 during the year, what is the effect in the financial statements?

• Increase profit by £80, increase trade receivables by £400

• Increase profit by £80, decrease trade receivables by £400

• Decrease profit by £80, increase trade receivables by £400

• Decrease profit by £80, decrease trade receivables by £400

An accrued expense is ...

• An expense for services which have been used but not yet invoiced at the end of the accounting period.

• An expense which has been paid in advance and relates to the next accounting period.

• An expense for services which have been used and have been invoiced in the accounting period.

• An expense which has been paid in advance and relates to this accounting period.

A prepaid expense is ...

• An expense for services which have been used but not yet invoiced at the end of the accounting period.

• An expense which has been paid in advance and relates to the next accounting period.

• An expense for services which have been used and have been invoiced in the accounting period.

• An expense which has been paid in advance and relates to this accounting period.

Is accrued expenditure a current asset or a current liability?

• Current asset

• Current liability