Calculate the missing information on the following revolving credit accounts. Interest is calculated on the unpaid or previous month's balance. Previous Balance 1. $167.88 2. $35.00 3. $605.42 4. $2,390.00 5. $3,418.50 6. $1,028.61 Annual Percentage Rate (APR) 18% 12% 9% Monthly Periodic Rate 1.5% .75% 1-% 4 |- 1% Finance Charge $2.52 Purchases and Cash Advances $215.50 $186.40 $156.12 $1,233.38 $329.00 Payments and Credits $50.00 $75.00 $200.00 $300.00 $1,200.00 $300.00 New Balance $335.90
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.
Finance charge
A type of fees that has been imposed on the credit amount is called as finance charge. It is computed on the amount credited in terms of loans or borrowings and generally expressed in percentage. It is levied by the lender or lending institution.
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