Allowance for Doubtful Debts Jones Ltd Trial Balance at 30 September 20X0 included: Debit $ Credit $ Receivables ledger control account 90,350 Allowance for doubtful debts brought forward 2,490 The following information is also available: (1) No entries have been made in respect of cash of $1,320 received from Marylyn Ltd whose balance had been written off last year, and 2) At 30 September 20X0 an irrecoverable balance of $1,950 is to be written off and the receivable allowance is to be adjusted to 1·5% of the remaining balance Required: Calculate the figure that will be reported in the statement of financial position at 30 September for receivables.
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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