Chabon Corp. had a beginning "Supplies" account balance of $500 on December 1, 20X1. It had the following occur during 20X1: On December 4, supplies costing $4,000 were purchased on account. On December 15, the company paid $4,000 for the supplies previously purchased on account. On December 31, 20X1, a physical count shows $900 of supplies to still be on hand (unused) Where should the "Supplies" account balance be reported on the financial statements?
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.
Chabon Corp. had a beginning "Supplies" account balance of $500 on December 1, 20X1.
It had the following occur during 20X1:
- On December 4, supplies costing $4,000 were purchased on account.
- On December 15, the company paid $4,000 for the supplies previously purchased on account.
- On December 31, 20X1, a physical count shows $900 of supplies to still be on hand (unused)
Where should the "Supplies" account balance be reported on the financial statements?
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