Aguinaldo enterprises reported an allowance for doubtful accounts of P8,000(credit) at December 31, 2019, before any adjustment. At the end of the year, the company reports accounts receivable of P500,000, 3% of which is estimated to be uncollectible. The adjusting entry required at December 31, 2019 would be: debit to Doubtful Accounts Expense and credit Allowance for Doubtful Accounts amounting to P8,000 P15,000 P23,000 P7,000
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.
Aguinaldo enterprises reported an allowance for doubtful accounts of P8,000(credit) at December 31, 2019, before any adjustment. At the end of the year, the company reports
P8,000
P15,000
P23,000
P7,000
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