Africa Traders, on 28 February 2020, received a cash amount of R1 560 from Mr. A South, a trade receivable whose account was previously written off as irrecoverable by Africa Traders as Mr. A South was previously declared insolvent. Africa Traders is not a registered VAT vendor. What will the effect be of the above transaction in the accounting equation of Africa Traders? Select one: a. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Credit loss recovered - R1 560 - R1 560 R0 b. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Trade receivables R0 + R1 560 - R1 560 R0 c. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Credit loss recovered + R1 560 + R1 560 R0 d. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Credit loss recovered Bank + R1 560 - R1 560 R0
Africa Traders, on 28 February 2020, received a cash amount of R1 560 from Mr. A South, a trade receivable whose account was previously written off as irrecoverable by Africa Traders as Mr. A South was previously declared insolvent. Africa Traders is not a registered VAT vendor.
What will the effect be of the above transaction in the
|
ACCOUNT DEBITED |
ACCOUNT CREDITED |
EQUITY |
= ASSETS |
- LIABILITIES |
|
Bank |
Credit loss recovered |
- R1 560 |
- R1 560 |
R0 |
|
ACCOUNT DEBITED |
ACCOUNT CREDITED |
EQUITY |
= ASSETS |
- LIABILITIES |
|
Bank |
Trade receivables |
R0 |
+ R1 560 - R1 560 |
R0 |
|
ACCOUNT DEBITED |
ACCOUNT CREDITED |
EQUITY |
= ASSETS |
- LIABILITIES |
|
Bank |
Credit loss recovered |
+ R1 560 |
+ R1 560 |
R0 |
|
ACCOUNT DEBITED |
ACCOUNT CREDITED |
EQUITY |
= ASSETS |
- LIABILITIES |
|
Credit loss recovered |
Bank |
+ R1 560 |
- R1 560 |
R0 |
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