TR AND ALLOWANCE FOR IMPAIRMENT PART 2

Trade RECEIVABLE =

• current ASSET

• current LIABILITY

ALLOWANCE for impairment of trade receivables = ESTIMATE of debts LIKELY to be uncollectible

• TRUE

• FALSE

ALLOWANCE for impairment of trade receivables =

• ASSET

• CONTRA asset

ALLOWANCE for impairment of trade receivables

• DR = +/ CR = -

• DR = -/ CR = +

IMPAIRMENT LOSS on trade receivables =

• EXPENSE

• INCOME

debt WRITTEN OFF = debts ................ uncollectible

• ESTIMATED LIKELY

• CONFIRMED

when TR CONFIRMED uncollectible = TR

• INCREASE

• DECREASE

TR should NOT be OVERstated. This follows the ............... theory.

• MATCHING

• PRUDENCE

To INCREASE allowance for impairment of TR =

• DR allowance for impairment of tr

• CR allowance for impairment of tr

Ali debt of $1000 is to be FULLY WRITTEN OFF.

• DR allowance for impairment of tr

  CR tr:Ali

• DR: tr: Ali

  CR allowance for impairment of tr