1. Study carefully the balances of the different accounts of Malabo Photocopying Center on December 31, 2020 Cash P 37,500 28.000 Accounts Receivable Notes Receivable 1,000 Furnitures and Fixtures 34.500 Photocopying Equipment 220,000 Accounts Payable 26.500 58.000 Loan Payable Note Payable 3.000 M. Dela Torre, Capital 200.000 5.000 M. Dela Torre, Drawing Service Income 150.000 8.000 32.000 Rent Income Salaries Expense Supplies Expense Utilities Expense 60.000 10.000 Advertising Expense 15.500 Miscellaneous Expense 2.000 Accounts TOTAL Debit Credit >
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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