Transfer of debtors accounting treatment


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Hi. I am working on the bookkeeping for a start up company. The company used to be the division of a different company. As part of the deal the new company had to take the debts of the old company division.

Normally when you are debiting debtors you are normally crediting Revenue but the Revenue relates to the old division.

I need to debit debtors but what do I credit?
 
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kirby

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I'm lost. So help me understand.
You took on the "debts of the old company" so you are talking about liabilities where now you have to pay others?
 
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I'm going to have opening debtors. These debtors will have come from the old company. Am I right in that the credit entry will be Revenue?
 

kirby

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I do not know because you never answered my question
 
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I'm not exactly sure I understand your question fully (lack of information) but if the assets have already been received (with the accompanying liabilities), I don't think recognizing revenue would be proper. Since the company has just begun its existence, it has no past; therefore, why not just debit assets and credit liabilities?
 

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