At the end of 2010, the business calculates 2.750 TL of present value for the notes receivables with maturity value of 3.250 TL. Which entry is made on Dec 31, 2010? a. 2.750 debit to 122-D on N/R and credit to 647-D. Int. Rev b. 500 debit to 122-D on N/R and credit to 647- D. Int. Rev c. 2.750 debit to 657- D. Int. Ex and credit to 122-D on N/R d. 500 debit to 657-D. Int. Ex and credit to 122-D on N/R
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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