Cassowary Corporation’s balance sheet at December 31, 2016 included a $20,400 account receivable from Quail Corporation of Australia. The account receivable is denominated as 30,000 Australian dollars (A$). Assuming no entries have been made since 12/31/2016, what single entry should Cassowary make on January 16, 2017 when the account receivable is collected and the exchange rate for A$ is $.67? Select one: a. Cash (fc) 20,100 Accounts Receivable (fc) 20,100 b. Cash (fc) 20,100 Exchange Loss 300 Accounts Receivable (fc) 20,400 c. Cash (fc) 20,400 Accounts Receivable (fc) 20,400 d. Cash (fc) 20,700 Accounts Receivable (fc) 20,400 Exchange Gain 300
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.
Cassowary Corporation’s
|
Cash (fc) |
20,100 |
|
|
|
|
20,100 |
|
Cash (fc) |
20,100 |
|
|
Exchange Loss |
300 |
|
|
Accounts Receivable (fc) |
|
20,400 |
|
Cash (fc) |
20,400 |
|
|
Accounts Receivable (fc) |
|
20,400 |
|
Cash (fc) |
20,700 |
|
|
Accounts Receivable (fc) |
|
20,400 |
|
Exchange Gain |
|
300 |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
