Assume that Rahma LLC sold OMR 2000 goods to Al Karama LLC on credit. After sales, based on the financial position of the purchaser, Rahma LLC anticipated OMR 400 as uncollectable accounts receivables. From the following given options, identify journal entry for writing off OMR400 balance as uncollectible on December 31st by following direct write-off method. a. Dr Bad debt expenses A/c OMR 400 and Cr Allowance for doubtful accounts OMR 400 b. Dr Bad debt expenses A/C MR 400 and Cr Accounts receivables A/C OMR 400. C. None of the given options d. Dr Accounts receivables A/C OMR 400 and Cr Bad debt expenses A/C OMR 400
Assume that Rahma LLC sold OMR 2000 goods to Al Karama LLC on credit. After sales, based on the financial position of the purchaser, Rahma LLC anticipated OMR 400 as uncollectable accounts receivables. From the following given options, identify journal entry for writing off OMR400 balance as uncollectible on December 31st by following direct write-off method. a. Dr Bad debt expenses A/c OMR 400 and Cr Allowance for doubtful accounts OMR 400 b. Dr Bad debt expenses A/C MR 400 and Cr Accounts receivables A/C OMR 400. C. None of the given options d. Dr Accounts receivables A/C OMR 400 and Cr Bad debt expenses A/C OMR 400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
Assume that Rahma LLC sold OMR 2000 goods to Al Karama LLC on credit. After sales, based on the financial position of the purchaser, Rahma LLC anticipated OMR 400 as uncollectable accounts receivables . From the following given options, identify journal entry for writing off OMR400 balance as uncollectible on December 31st by following direct write-off method.
a. Dr Bad debt expenses A/c OMR 400 and Cr Allowance for doubtful accounts OMR 400
b. Dr Bad debt expenses A/C MR 400 and Cr Accounts receivables A/C OMR 400.
C. None of the given options
d. Dr Accounts receivables A/C OMR 400 and Cr Bad debt expenses A/C OMR 400
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