Learning objectives

1 Explain and identify examples ofreceivables and payables.

2 Identify the benefits and costs ofoffering credit facilities to customers.

3 Understand the purpose of credit limitsand an aged receivables analysis.

4 Prepare the bookkeeping entries to writeoff a bad debt, record a bad debt recovered and create and adjust an allowancefor receivables.

5 Identify the impact of bad debts on theincome statement and on the statement of financial position.

Overview