1. There are several mistakes in the Umer & Bros Ltd. Trial balance. Identify the errors and make the corrected trial balance. 10 8 11 7 S 6 3 4 1 2 Heads of Accounts Uner Owner Equity Umer Drawings Equipments Sales Due from Customers Purchases Purchase Return Bank Loan Creditors Taxes Cash in Hand Ref Debit 560 2.850 1.260 364 528 720 Credit 1.551 2.850 530 996
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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