Neco Model Questions Vol1 2017 Financial Accounting Question 23
Practice objective / multiple choice question 23 from the 2017 Neco Model Questions Vol1 Financial Accounting examination.
A business had opening trade receivables of \(\text{₦}120,000\). Credit sales during the year were \(\text{₦}560,000\). Cash received from debtors (including cash sales) amounted to \(\text{₦}480,000\). Sales returns were \(\text{₦}20,000\) and discount allowed on early payment was \(\text{₦}8,000\). At year‑end the firm estimates that 2 % of the closing trade receivables will be uncollectible and creates a provision. Determine (a) the closing balance of the trade receivables control account before provision, (b) the amount of the provision, and (c) the net realizable value of trade receivables.
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About This Question
This is Neco Model Questions Vol1 2017 Financial Accounting Question 23. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Financial Accounting examination.
Difficulty level: Medium .
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