ICAEW AF · Chapter 10 · Question 4 of 9
At the year end, a business has trade receivables of £54,700 and an allowance for receivables of £1,650. How are these presented in the statement of financial position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Trade receivables of £53,050 shown within current assets
Explanation
The allowance for receivables is a deduction from the related asset, not a liability. Receivables are presented net: £54,700 - £1,650 = £53,050, within current assets. This reflects the amount the business expects to collect.
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