Monica30 wrote:

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Hi 

I have question in my assessment which asks to give an argument for and argument against setting allowance for irrecoverable receivables at 4% of net receivables at the end of the year.

 Total receivables £390 000

irrecoverable receivables £26 800

Allowance

brought forward last year balance  £20 000

Ive been thinking about it for hours and I really dont know what the answer can be. 

Please help

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If you are doing a timed assessment, you should answer the question without assistance, otherwise in breach of your assessement rules.  If you are doing an untimed assessment you should answer the question using your knowledge. If you have to think about it for hours you should not answer the question, hand in your assessment without answering otherwise how will your assessor know where your weak spots are. It is a pointless assessment if you have to ask other people.  Afterwards, then, to improve, you need to go back to your study notes and re-read them to locate your answer. Break down the question. Firstly ask yourself why you need to make such an allowance, this will give you the advantages, secondly what happens if you do not make the allowance, this will give you the disadvantes.  Then ask why you should consider the percentage used, what can this help to achieve, why and when would you need to decrease or increase this %.  Pandemic classic. That will then give you advantages/disadvantages of using 4% instead of say 2% or 8%.  If your study notes are rubbish, buy study notes from other providers, this is useful anyway to expand your knowledge. Plenty of free online resources as well.  Once you have done the above, perhaps put your thoughts on here so folk can add to the list, rather than just providing an answer, which as you know wont help your development.

AC wrote:

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Monica30 wrote:

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Hi 

 

Please help

-- Edited by Monica30 on Saturday 13th of February 2021 01:08:11 PM

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 ?

Why?

Good advice given. Plus a good hint to an answer.

 

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 Why did you remove your question?