Conventional accounting practice allows sales revenue to be included in an accounting period than the one in which cash relating to the sale is received. This is risky because debtors may not always pay what they owe. Hence the need to set up a provision for bad and doubtful debts.

 

This shows that Sodexho Alliance got into some difficulties over doubtful sales

 

What factors would you take into account in deciding which of your outstanding trade debtors might be bad or doubtful?

Answer rating: 100% (QA)

When determining which of your outstanding trade debtors might be bad or doubtful you should conside... View the full answer