Receivables, Payables, Notes, and Allowance for Doubtful Accounts
What this domain tests
This domain covers 売掛金, 買掛金, 受取手形, 支払手形, and the allowance for doubtful accounts. Grade 3 tests the difference between merchandise and non-merchandise credit, the 差額補充法 adjustment, and write-offs.
Core rules
- 売掛金 and 買掛金 arise from merchandise sales and purchases. 未収入金 and 未払金 arise from non-merchandise transactions.
- 受取手形 is an asset; 支払手形 is a liability. A note renewal or exchange requires removing the old note and recording the new one.
- 貸倒引当金 is a contra-asset. Under 差額補充法, required allowance = eligible receivables × rate; the adjusting entry is for the difference between required and existing balance.
- Write-off: 貸倒引当金 / 売掛金. If the allowance is too small, debit 貸倒引当金 up to its balance and 貸倒損失 for the excess.
- 貸倒引当金繰入 is an expense; the allowance itself is not.
Worked example
At year-end, 売掛金 is ¥600,000 and 受取手形 is ¥200,000, so eligible receivables are ¥800,000. The rate is 2%, and the existing allowance is ¥10,000. Required allowance: 800,000 × 2% = ¥16,000. Adjustment: 16,000 − 10,000 = ¥6,000. Entry: 貸倒引当金繰入 6,000 / 貸倒引当金 6,000. Next year, write off ¥12,000: 貸倒引当金 10,000 and 貸倒損失 2,000 / 売掛金 12,000. The allowance is exhausted first; only the excess hits profit.
Traps
- Applying the rate to cash or to receivables not covered by the instruction.
- Recording the full required allowance instead of the difference under 差額補充法.
- Treating 貸倒引当金 as a liability.
- Assuming a write-off always reduces profit; it does not when the allowance is sufficient.
- Confusing 受取手形 with 売掛金 when a note replaces a receivable.