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7 marksBad Debts and Provisions for Doubtful Debts

CSEC Principles of Accounts · May/June 2012 · Paper 2 · Question 2(a)(i)

The Sales Ledger of JJ's Paradise as at 31 December 2010 shows balances for Nat Lewis (850), Jeb Steven (3 600), and Anna Tomas ($450), which are to be written off as bad debts.

Prepare the journal entry on page 5 of JJ's journal to write off the three receivables, including a narrative.

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Other parts of this question

  1. 2(a)(ii)Prepare the journal entry, including a narrative, to create the Provision for Doubtful Debts Account.[4 marks]
  2. 2(a)(iii)Draw up the Provision for Doubtful Debts Account for the two years, 1 January 2010 to 31 December 2011, to show the change in provision, balancing the account…[5 marks]
  3. 2(b)(i)State ONE reason why adjustments are made to financial statements.[1 mark]
  4. 2(b)(ii)Identify ONE accounting concept which guides adjustments to financial statements.[1 mark]
  5. 2(b)(iii)Explain how the concept identified in (b)(ii) guides adjustments made to financial statements.[2 marks]

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