A-LevelAccountingPreparation of financial statements9706/12 · May/June 2025 · Q151 Mark
The books of a business showed the following balances at the end of the financial year on 31 December. trade receivables $18820 allowance for irrecoverable debts $760 The following adjustments need to be made. 1 An irrecoverable debt of $470, which was written off in the previous year, has been recovered. No entries for this have been made in the financial statements. 2 Irrecoverable debts of $680 need to be written off. 3 The allowance for irrecoverable debts is to be 5% of trade receivables. How will the total of these adjustments be recorded in the statement of profit or loss for the year ended 31 December?
A$63 expense
B$63 income
C$357 expense
D$357 income
✓ Correct answer
C: $357 expense
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