ABC Corporation determines that accounts receivable worth P500,000 are considered uncollectible within their credit terms. Thus the company accountant journalized the following entry:

Doubtful Accounts Expense 500,000

Allowance for Doubtful Accounts 500,000

QUESTIONS:

1. For BIR(taxation) purposes, can ABC Corp claim the doubtful accounts expense as a deduction from income tax?

2. What is the entry to record any deferred tax asset or liability arising from the recognition of the said doubtful accounts expense?

Answer rating: 100% (QA)

1 Yes ABC Corp can claim the doubtful accounts expense as a deduc... View the full answer