few accounting qs (1 Viewer)

[kahuna14]

1. wats diff with perpetual and periodic inventory?
and
2. when writing off a bad debt under the ageing method, is it dr allowance for doubtful debts and cr acounts receivable, or is it meant to be dr doubtful debts expense?

thanks

 

[Eagles]

1. wats diff with perpetual and periodic inventory?
and
2. when writing off a bad debt under the ageing method, is it dr allowance for doubtful debts and cr acounts receivable, or is it meant to be dr doubtful debts expense?

thanks

1. Perpetual. you know exactly what you have in your inventory at any time.
Periodic. you have no idea how much you have untill you do a stocktake.

2. Dr allowance, Cr a/c.
You made the allowance by Dr bad debts, Cr Allowance.

which leads me to ask.. is it still provision for doubtful debts? or some other thing.. since the new changes defined something else for "provision"

 

[tempco]

what do you mean "still provision for dd"? as in during the write-off, or when you are setting aside the provision?

 

[Eagles]

i meant: is it suppose to be called "Provision for DD" or "Allowance for DD"?

just like they changed "Asset revaluation Reserve" or "Revaluation Surplus".. since they have new defination for "reserve"

btw, were you waiting outside louis yeung's office this arvo?

 

[tempco]

allowance is used in past papers and in examples outside the T&G textbook. that's what I've noticed anyway. i think it's safe to assume it means the same thing. i'll ask my acct tutor tomorrow if i get the chance.

if you we talking to me, no i wasn't.

 

[Eagles]

ah, the changes were made this yr..

Anyways, give us the answer if ya know, I dun like webct discussions as such.

 

[Minai]

It's now allowance for doubtful debts, not provision.

 

[Grizzly]

Make sure you know how to record DD using T-accounts, not just the journal entries - because its important for cash flows.

Or am i thinking 1b ?

 

[Eagles]

yes, cashflow statements are 1b

 

[kahuna14]

thanks.

and also wat kind of account is gst recoverable?

 

[Grizzly]

thanks.

and also wat kind of account is gst recoverable?

GST recoverable ?
Thats the first time ive heard that...

Im guessing an asset when positive, liability when negative?
I mean, GST outlays and GST paid offset each other , but if the net recovarable amount is negative, that means GST is owing.

 

[tempco]

recoverable offsets payable. iit's payable's contra acct.

eg.

dr supplies expense (taxable)
dr gst recoverable
cr cash

recoverable > payable, it becomes an asset account.

(t&g p460)

 

[Eagles]

yo,

you guys know if we do the provision for warrenty in the notes?

 

[tempco]

we had it for a tute question, so i'm guessing yes.

 

[Eagles]

no.. like, where do we disclose it?

loans are shown on NCL on the Balance sheet
contingient liabilities are disclosed in the notes
provision for warrenty is disclosed.. where?

 

[tempco]

it's a provision/allowance, so that'd be a liability... non-current most probably.

weird how the word 'provision' is being cut out... it's called warranty liability now.