Help with practice paper FTC Kaplan - Bad Debt

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:32AM in AAT student discussion
Hi

I am in the process of doing the practice paper for unit 5. I am trying to make the extended trial balance balance but it wont work! i know i have messed up with the provision for bad debt since the amount im out by is double this amount. I need to know what to do with the Bad Debt and provision for bad debt. I also have a line for Bad debt written off and one for increase in provision bad debt.

If there is anyone out there who is also studying with FTC Kaplan and knows what i'm going on about can you please help me. I am totally stressing out because I need to send this off so I can ask for the skills test before the exam in December..

Thanks a lot,
Chana

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help with practice paper FTC Kaplan - Bad Debt

    Hi

    Not studying with Kaplan, but the provision for Bad Debts is a credit which is deducted from the Debtors total in the Balance sheet.

    Increase in bad debt shows as an expense in the P&L.

    Tracy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help with practice paper FTC Kaplan - Bad Debt

    To deal with the provision for bad debt, we first calculate the new balance of the provision for bad debts. This is usually a percentage of debtors i.e 5% of debtors. This will give the new balance of provision for bad debts.

    Then, we compare the difference between the new balance of the provision for bad debts with the old balance of provision of bad debts which is in the trial balance.

    If the the new balance new balance of the provision for bad debts is greater then the old balance of provision of bad debts, we debit the difference.

    i.e DEBIT BADDETS EXPENSE
    CREDIT PROVISION FOR BAD DEBTS

    If the the new balance new balance of the provision for bad debts is less then the old balance of provision of bad debts, we debit the difference.

    i.e DEBIT PROVISION FOR BAD DEBTS
    CREDIT BADDETS EXPENSE

    Therfore when extenting the trial balance,
    In the balancesheet section, The provision for bad debts account balance will be
    (The perctange of debtors)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help with practice paper FTC Kaplan - Bad Debt

    HI I am studying with FTC Kaplan and passed FRA last June, which pratice paper are your doing, I will try and guide you
    sanjay
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help with practice paper FTC Kaplan - Bad Debt


    Sanju
    How was the mock exam with FTC for the june sitting ie how close was the paper to the actual exam.


    John
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help with practice paper FTC Kaplan - Bad Debt

    sanju(or anyone) can i ask silly question.sorry, didn't want to open new thread.
    Im doing my first exams in dec.
    Do they give you any scrap paper??
    I would really need it to draw some answers for theory questions, like memos etc.
    Thanks.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help with practice paper FTC Kaplan - Bad Debt

    No scrap paper when I did them. Make sure that your workings and notes are clearly labelled as such for each question and you'll be fine.

    Good luck with the exams
    Jackie

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