Based on the review of collectibility of the account balances in "prior to January 1, 202 aging category, additional accounts totaling P100,000 are to be written off on December 2020. Effective with the year ended December 31, 2020, the entity adopted a new accounti method for estimating the allowance for doubtful accounts at the amount indicated by t year-end aging of accounts receivable. Required: a. Determine the allowance for doubtful accounts before adjustment. b. Determine the required allowance for doubtful accounts on December 31, 2020, c Prepare adjusting entry ta record the daubtful accounts expense for 2020.
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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