1/15
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
the portion of the debt that is not collected is written off to the impairment loss on trade receivables
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
the entire amount is written off to the allowance for impairment loss of trade
receivables
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
the portion of the debt that is not collected is written off to the allowance
for impairment of trade receivables
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
the entire amount is written off to the impairment loss on trade receivables
2/15
Recording the allowance for impairment of trade receivables is in accordance with the prudence theory that states that ______________.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
assets are not overstated
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
assets are not understated
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
income is not overstated
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
income is not understated
3/15
The allowance for impairment of trade receivables is shown in the ______________.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
trading portion of the statement of financial performance
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
profit and loss portion of the statement of financial performance
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
current assets section of the statement of financial position
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
current liabilities section of the statement of financial position
4/15
Impairment loss on trade receivables is shown in the ______________.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
trading portion of the Statement of Financial Performance
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
expenses portion of the Statement of Financial Performance
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
current assets section of the Statement of Financial Position
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
current liabilities section of the Statement of Financial Position
5/15
Trade receivables is presented as net trade receivables which is ______________.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
trade receivables plus impairment loss on trade receivables
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
trade receivables plus allowance for impairment of trade receivables
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
trade receivables less allowance for impairment of trade receivables
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
trade receivables less impairment loss on trade receivables
6/15
When the balance in the allowance for impairment of trade receivables increases at the end of a financial period compared to the beginning of the period, there is ______________.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
no effect on profit for the period
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
a decrease in profit for the period
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
a decrease in gross profit for the period and profit for the period
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
an increase in profit for the period
7/15
Why does a business give trade discounts?
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
to increase cash payment
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
to encourage customers to make prompt payment
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
to reduce debtor balance
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
to increase sales
8/15
The effect of writing-off a trade receivable balance in the current period where an allowance for impairment of trade receivable had been made in the prior accounting period, ______________ in the current accounting period.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
increases profit
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
decreases profit
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
increases profit
9/15
Trade receivables: $20,000
It was estimated that 5% of trade receivables may be uncollectible.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
$800
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
$200
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
$1,000
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
$1,800
10/15
Trade receivables: $20,000
It was estimated that 5% of trade receivables may be uncollectible.
What would be the amount that would be shown as an expense in the statement of financial performance?
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
$800
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
$200
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
$1,000
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/import/sqb_empty.jpg?w=640&ssl=1)
$1,800
11/15
Trade receivables: $20,000
It was estimated that 5% of trade receivables may be uncollectible.
The name of the expense shown in the statement of financial performance is _____________________
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
Reversal of impairment loss on trade receivables
12/15
Trade receivables: $20,000
It was estimated that 5% of trade receivables may be uncollectible.
On 30 June 2022, it was discovered trade receivable Tan who owed $600 was declared bankrupt. ABC Trading has not yet written off this amount owing. The journal entry to write off the amount owing by Tan is:
13/15
Trade receivables: $20,000
It was estimated that 5% of trade receivables may be uncollectible.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
$800
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
$1,000
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
$970
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
$770
14/15
What are the journal entries necessary for decreasing the allowance for impairment of trade receivables by $100?
15/15
The accounting theory that supports the creation of the allowance for impairment of trade receivables is the __________ theory.
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
Accounting entity
![](https://i0.wp.com/principlesofaccounts.com/wp-content/plugins/smartquizbuilder/includes/images/sqb_empty.jpg?w=640&ssl=1)
Materiality