9.7X Enter the following items in the necessary personal accounts; do not write up the other accounts. Balance each personal account at the end of the month. 2017 Sales on credit to L. Sterling $445, L. Lindo $480, R. Spencer $221. Aug 1 Goods returned to us by L. Sterling $15, R. Spencer $33. Aug 4 Sales on credit to L. Lindo $66, R. Spencer $129, L. Banks $465. Aug 8 Aug 9 We received a cheque for $430 from L. Sterling. Aug 12 Sales on credit to R. Spencer $235, L. Banks $777. Goods returned to us by L. Banks $21, R. Spencer $25. Aug 19 We received cheques as follows: R. Spencer $300, L. Lindo $414. Aug 22 Sales on credit to L. Lindo $887, L. Banks $442, Aug 31
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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