any’s allowance for doubtful accounts had a credit balance of P110,000 at December 31, 2019. Meme accrues doubtful accounts expense for 2020 amounting to P48,000 based on sales. During 2020, Meme write off accounts totaling P90,000. The aging of accounts receivable indicated that a P345,000 allowance for doubtful accounts was required at December 31, 2020. What amount of doubtful accounts expense should be reported for 2020? a. P 48,000 c. P193,000 b.
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.
Meme Company’s allowance for doubtful accounts had a credit balance of P110,000 at December 31, 2019. Meme accrues doubtful accounts expense for 2020 amounting to P48,000 based on sales. During 2020, Meme write off accounts totaling P90,000. The aging of
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