Allowance for ITR

Allowance for ITR is a ___________ account

• asset

• contra asset

• equity

• expense

Allowance for impairment of trade receivables has a __________ balance.

Select the double entry to create allowance for ITR.

• Dr Impairment loss on inventory

  Cr Allowance for ITR

• Dr Impairment loss on TR

  Cr Allowance for ITR

• Dr Allowance for ITR

  Cr Trade receivables

• Dr Trade receivables

  Cr Allowance for ITR

Wesley maintains a 5% allowance for ITR. On 30 June 2023, the trade receivables balance was $5000. Wesley decided to write off Ethan's debt of $200. What is the amount of allowance Wesley will have on 30 June 2023?

Tan maintains a 6% allowance for ITR.
On 1 July 2022, Tan's books has allowance for ITR, $420.

On 30 June 2023, Tan's trade receivables balance was $9 200.

What is the amount to be reported in the statement of financial performance for the year ended 30 June 2023?

On 1 May 2022, H has $380 allowance for ITR. On 30 April 2023, H reduced his allowance for ITR to $320. How much must be reported in the statement of financial performance for the year ended 30 April 2023?

J's allowance for ITR on 1 Jan 2022 was $800. On 31 Dec 2022, J increased the allowance for ITR to $900. What are the double entries to effect this?

• Dr Impairment loss on TR, $900

  Cr Allowance for ITR, $900

• Dr Impairment loss on TR, $100

  Cr Allowance for ITR, $100

• Dr Allowance for ITR, $900

  Cr Impairment loss on TR, $900

• Dr Allowance for ITR, $100

  Cr Impairment loss on TR, $100

The allowance for ITR on 1 May 2022 was $900.
On 1 Oct 2022, the business wrote off debts due from G, $400.

On 30 April 2023, the business trade receivables amounted to $7800 and it decided to continue with 4% allowance. What double entries would be required to adjust on 30 April 2023?

• Dr Allowance for ITR, $312

  Cr Impairment loss on TR, $312

• Dr Allowance for ITR, $188

  Cr Impairment loss on TR, $188

• Dr Impairment loss on TR, $312

  Cr Allowance for ITR, $312

• Dr Impairment loss on TR, $188

  Cr Allowance for ITR, $188

• Dr Impairment loss on TR, $712

  Cr Allowance for ITR, $712

David wrote off debts of $420 owed by King. How does this affect the financial records?

• TR and profit are reduced by $420

• TR is reduced by $420;

  Impairment loss on TR increased by $420

• TR and Profit increased by $420

• TR and Allowance for ITR reduced by $420

• TR reduced by $420;

  Allowance for ITR increased by $420

The allowance for ITR balance on 1 May 2022 was $940.

During the year, debts of $320 was written off.

On 30 April 2023, the trade receivables balance was $18 000. Business continued with 3% allowance for ITR.

State how this will affect profit for the year ended 30 April 2023. Indicate increase or decrease, followed by amount.