Page 158 - F3 -FA Integrated Workbook STUDENT 2018-19
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Chapter 11
Accounting for irrecoverable debts
2.1 Accounting for irrecoverable debts
When it becomes clear that a customer is unlikely to pay, the receivable balance
must be removed (since it is no longer an asset) and transferred to the statement of
profit or loss as an expense for the period. This may also be referred to as a bad
debt.
The double-entry to record an irrecoverable debt is:
Debit Irrecoverable debts expense account
Credit Trade receivables’ ledger control account
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