Apple Company determined that the net realizable value of its accounts receivable at December 31, 2020 based on aging of accounts receivable was P3,160,000. Additional information for 2020 is as follows: Allowance for doubtful accounts - Jan. 1 500,000 Accounts receivable - December 31 4,800,000 Doubtful accounts written off during the year 320,000 Doubtful accounts recovered during the year 70,000 What should be the doubtful accounts expense for 2020? 390,000 520,000 480,000 460,000
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.
Apple Company determined that the net realizable value of its
Allowance for doubtful accounts - Jan. 1 500,000
Accounts receivable - December 31 4,800,000
Doubtful accounts written off during the year 320,000
Doubtful accounts recovered during the year 70,000
What should be the doubtful accounts expense for 2020?
- 390,000 520,000
- 480,000 460,000
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