8) On December 31, 2020, James Company has an accounts receivable balance of $324,000 before any year-end adjustments. The Allowance for Doubtful Accounts has a $1,100 credit balance. The company prepares the following aging schedule for accounts receivable: 1-30 days 31-60 days $157,000 $89,000 1% What is the Uncollectible-Account Expense at December 31, 2020? B) $1,570 61-90 days $51,000 Total Balance over 90 days $324,000 Percent uncollectible 527,000 21% 2% 4% A) $9,960 C) $11,060 D) $12,160
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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