at the end of 2020 vermillion corp has an account receivable of 479,200 and an allowance for doubtful accounts of 30300. On jan 24 2021, Vermillion Corp learns that its 11,600 receivables from hutley corp is not collectable. Management authorizes a write off. But on March 4th 2021, Vermillion Corp receives payment in full of 11,600 from Hutley corp after the write off. prepare the required journal entries to record this transaction
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.
at the end of 2020 vermillion corp has an
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