A-LevelAccountingIrrecoverable Debts and AllowancesMay/June 2025Paper 1 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
The correct answer is C. This question tests the candidate's understanding of irrecoverable debts and allowances within the Accountingsyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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