PRC-1 · Chapter 5 · Question 68 of 100
Using the Gross Receivables of Rs. 189,000 from the previous question, if the business maintains a 5% general allowance, what is the Net Trade Receivables figure in the Statement of Financial Position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 179,550
Explanation
Allowance = 5% of 189,000 = 9,450. Net Receivables = Gross (189,000) - Allowance (9,450) = Rs. 179,550.
More Bad and Doubtful Debts MCQs
- Q70Which of the following scenarios describes a 'Good Debt'?
- Q71If a business decides that an outstanding balance of Rs. 10,000 is 100% irrecoverable, what is the impact on the 'Allowance for Doubtful…
- Q72The turnover of a business was Rs. 2,000,000. Trade receivables are 5% of turnover. The business wishes to have an allowance of 4% of…
- Q73If an entity recovers a previously written-off debt but mistakenly credits it to the customer's account in the Receivables Ledger instead…
- Q74A customer owes Rs. 50,000 and goes bankrupt. The liquidator announces that unsecured creditors will receive 20 cents on the dollar. What…