An analysis of cash received from customers during the year revealed that the P705,600 was received from customers availing the 10 day discount period; P396,000 from customers availing the 15 day discount period; P2,400 represented recovery of accounts written off and the balance was received from customers paying beyond the discount period. UNIV COMPANY’s year-end balance of Allowance for doubtful accounts was estimated to be 5% of outstanding accounts receivable as of December 31, 2021. What is the AR December 31 2021
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.
An analysis of cash received from customers during the year revealed that the P705,600 was received from customers availing the 10 day discount period; P396,000 from customers availing the 15 day discount period; P2,400 represented recovery of accounts written off and the balance was received from customers paying beyond the discount period. UNIV COMPANY’s year-end balance of Allowance for doubtful accounts was estimated to be 5% of outstanding
What is the AR December 31 2021
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