those who have accounting background or knows accounting can you all please help me up?? i got some doubt in me.. i actually got a question.. i got this question from my progress test 1 which is about 1 month ago..
here goes the question..
a company found out that a receivable has been declared bankrupt. his debt has been allowed for earlier in the year.. what should i do?? who should i debit?? credit must be receivables account is it?? then debit?? is it bad debt or allowance for receivables??
i remember during my last exam i remember last time ah jie told me that it should be:
debit allowance for receivables credit receivables but my teacher told me that wrong.. it should be debit bad debt cause it became bad debtbut today when i was preparing for my tomorrow progress test 2 i bump into the same question from BPP revision kit and their answer was debit allowance for receivables.. so which one is correct?? which should i follow?? i got confuses.. can anybody please help me??
HAIZ…