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sjp


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Bad debts and Provisions
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I am struggling on one of the questions on my last assignment for level 2, I would contact my tutor but as it's weekend I doubt I'll get a response.

I am completing the P&L account and BS

One of the question is bad debt provision currently stands at 500. It is to be increased to 5% of the total debtors. Total debtors is 26,400 and I have worked out the 5% is 1,320.

Is this my new bad debt provision, or do I add on the 500 as well to make it 1,820? If not where does the 500 go?

Thanks for your help


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Stardoe


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Hi sjp,

Your bad debt provision is to be increased to 5% of total debtors, and as you have worked out that is £1320. Therefore your new provision will be £1320, not £1820. The entries you need to make are CR bad debt provision with the difference between £1320 and £500 and DR bad debts with the same amount.

HTH
Pauline

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Pauline
sjp


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Thanks Pauline, it's much appreciated, my workbook doesn't cover the subject very well. 

Hopefully I can finish the question in the morning, I feel like I have been on this assignment forever as I really came unstuck with question 1.  All other questions are done so hopefully I can have this submitted soon.

Thanks again

SJ


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Stardoe


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Hi SJ,

No problem. Are you with Ideal Schools by any chance? smile.gif

Pauline

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Pauline
sjp


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I am indeed, spent a day last week email back and forth with Brian as I just couldn't get question 1 assignment 6 right and it knocked my confidence a bit.

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Stardoe


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I'm with Ideal Schools as well....have found their support very good. Don't worry about not seeing a question, we all have days like that ! Sometimes it helps to leave it for a while and go back to it. Also, everyone on here is very helpful and friendly, so will be a good extra resource for you. Sometimes someone else can put it in a way that suddenly makes you see it! smile.gif Any help I can give, let me know smile.gif

Pauline

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Pauline
sjp


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Thanks Pauline

I may take you up on that offer as I believe Lvl 3 is a big step up, ill hopefully be able to sit Lvl 2 exam in a week or two

SJ

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Stardoe


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Hi SJ,

Yes, Level 3 is definitely a big step up. Good luck with the Level 2 exam. I would strongly advise you to purchase the mock paper from the ICB shop and work through that first before sitting the real thing. It definitely helps.

Pauline

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Pauline
sjp


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I will be getting the mock, and if I'm right Ideal send you a downloaded past paper to do also, I have just emailed Brian to find out which one so I can get some of the others so I am fully prepared.

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