JAMB Past Questions and Answers - Page 954

This is the basis for recording in government accounting where revenue are recorded when cash is received.

Branch debtors account is used to exercise control over branch debtors. It is maintained when the branch is allowed to sell goods on credit. This account records transactions with the branch debtors and is prepared like sundry debtors account.

No explanation has been provided for this answer.

The memorandum of association is the document that sets up the company and the articles of association set out how the company is run, governed and owned. The articles of association includes the responsibilities and powers of the directors and the means by which the members exert control over the board of directors. 

The MOA of a company contains the object for which the company is formed. It identifies the scope of its operations and determines the boundaries it cannot cross.

At times a debtor whose account had earlier been written off by a creditor as a bad debt may decide to make a payment, this is called recovery of bad debts. While posting the journal entry for recovery of bad debts it is important to note that it is treated as a gain to the business & that the debtor should not be credited as in case of sales.

While journalizing for bad debts, debtor’s personal account is credited and bad debts account is debited because bad debts written off are treated as a loss to the business and now when they are recovered it is seen as a fresh gain.

Journal entry for recovery of bad debts is as follows;

Debit (Cash or Bank) depending on how the money is received

Rules applied as per modern or US style of accounting 

The closing journal entry for bad debts recovered would be as follows;