(Click the icon to view the transactions.) Requirements 1. Record bad debt expense for December using the direct write-off method. 2. What balance of accounts receivable does Windy Mountain report on its 31 December balance sheet under the direct write-off method? Does it expect to collect the full a Requirement 1. Record b Date Dec 31 Transactions • sales of $186 000 ($165 000 on credit; $21 000 for cash) • collections on account, $127 000 - X planations aren't required.)
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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