Questions about LCCI Lv1 exam

(1) It is highly recommended to add detailed narrative in every journal for future reference, although it is not mandatory.

(2) We make a direct write-off when a particular debt is proved to be unrecoverable [Dr Bad Debit (P/L) and Cr Accounts receible (B/S)] .

We make certain percent of specific provision for a debt when full recoverbility of which is in doubt [Dr Bad Debit (P/L) and Cr Provision for doubtful debt (B/S)].

We can also make general provision for accounts receivable based on the related accounting policy set by the company [Dr Bad Debit (P/L) and Cr Provision for doubtful debt (B/S)], e.g. we make 50% provision for debts over 6 months below 12 monhts, and make 100% for debts over 12 months.

Note : Accounts Receivable should be set off against Provision for Doubtful/bad Debt before stated on Balance Sheet.