AUDIT OF ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS It is the company’s policy to provide allowance for doubtful accounts as follows: Less than 3 months P2,500,960 1% 3 to 6 months 843,200 5% Over 6 months 274,500 10% Total P3,618,660 An analysis of the accounts receivable schedule showed that several long outstanding accounts for more than a year totaling P152,460 should be written-off. 4. Accounts receivable A. P3,936,000 B. P3,618,660 C. P3,783,540 D. P3,613,140 5. Allowance for doubtful accounts A. P110,360 B. P152,640 C. P130,316 D. P88,217 6. Notes and interest receivable A. P1,331,960 B. P1,332,160 C. P1,332,500 D. P1,300,000
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.
AUDIT OF
It is the company’s policy to provide allowance for doubtful accounts as follows:
Less than 3 months P2,500,960 1%
3 to 6 months 843,200 5%
Over 6 months 274,500 10%
Total P3,618,660
An analysis of the accounts receivable schedule showed that several long outstanding accounts
for more than a year totaling P152,460 should be written-off.
4. Accounts receivable
A. P3,936,000 B. P3,618,660 C. P3,783,540 D. P3,613,140
5. Allowance for doubtful accounts
A. P110,360 B. P152,640 C. P130,316 D. P88,217
6. Notes and interest receivable
A. P1,331,960 B. P1,332,160 C. P1,332,500 D. P1,300,000
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