Sky Ltd. has received the information of that one of its major customers, which represents 20%...
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Sky Ltd. has received the information of that one of its major customers, which represents 20% of tłade receivables, went bankrupt. The trade receivables balance is £34, 000. In addition, insurance expense includes a payment of £2, 500 that belongs to the next accounting period. After considering the two journal entries related to the two economic transactions, which of the following statements is true? O a. Sky Ltd. decreases assets by £4, 300 and increases expenses in the same quantity. O b. Sky Ltd. decreases assets by £6, 800, decreases expenses by £4, 300 and increases liabilities by £ 2, 500. O c. Sky Ltd. increases assets by £4, 300. O d. None of the answers is true. Sky Ltd. has received the information of that one of its major customers, which represents 20% of tłade receivables, went bankrupt. The trade receivables balance is £34, 000. In addition, insurance expense includes a payment of £2, 500 that belongs to the next accounting period. After considering the two journal entries related to the two economic transactions, which of the following statements is true? O a. Sky Ltd. decreases assets by £4, 300 and increases expenses in the same quantity. O b. Sky Ltd. decreases assets by £6, 800, decreases expenses by £4, 300 and increases liabilities by £ 2, 500. O c. Sky Ltd. increases assets by £4, 300. O d. None of the answers is true.
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Option A Note Out of total trade receivables of 34000 20 of it went bankrupt and he... View the full answer
Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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