Case 16. Inutz Company is preparing interim financial statement for the first quarter ended March 31. Expenses in first quarter totaled P5,000,000 of which 25% was variable. The fixed expenses included property tax for the year o P1,600,000 and depreciation expense P800,000 for the year for an equipment that was available for use on January 16. What amount should be reported as total expenses for the first quarter ended March 31? 5,000,000 2,600,000 3,000,000 3,200,000 а. b. с. d.
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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