Accounting Online Program Certification Practice Test

What is the amount of trade receivables that should be reported at 30 June 20X6 after writing off bad debts?

1. £838,000

2. £766,000

3. £780,000

4. £800,000

The correct answer is: £766,000

To determine the amount of trade receivables that should be reported at 30 June 20X6 after writing off bad debts, it's essential to understand how trade receivables are affected by bad debt write-offs. Trade receivables represent amounts owed to a business by its customers for goods or services already provided. When bad debts are written off, the total amount of trade receivables decreases because those debts are no longer expected to be collected. This means that the remaining trade receivables reflect only the debts considered collectible. In this context, after accounting for the write-off of bad debts, the remaining balance of trade receivables would be the total trade receivables minus the amount that has been identified as non-collectible. The choice indicating £766,000 correctly reflects this adjusted balance. It’s crucial to apply the write-off amounts accurately to arrive at the final figure. If there were any calculations prior to this step that clarified the original amount of trade receivables or the sum of bad debts written off, this figure should have been derived from that baseline. Any other figures provided are not accurate reflections of the net receivables after the adjustment for bad debts.