Economics · Accounts Receivable
What is the primary difference between an irrecoverable debt and an allowance for receivables?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1There is no difference; they are two terms for the same accounting entry.
- 2An allowance for receivables is only used for cash sales.
- 3An irrecoverable debt is removed from the general ledger, while an allowance is a separate account that offsets the receivables balance.✓
- 4An irrecoverable debt is a credit balance, while an allowance is a debit balance.
Correct answer
An irrecoverable debt is removed from the general ledger, while an allowance is a separate account that offsets the receivables balance.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Preparing for Economics?
Practice full-length Economics mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Accounts Receivable MCQs →Want more practice questions on Accounts Receivable?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Accounts Receivable