Company prepared an aging of accounts receivable on December 31 and determined that the net realizable value of the accounts receivable was P1,500,000. Allowance for doubtful accounts on January 1 is debit balance of P100,000. Accounts written off as uncollectible is P200,000 while recovery of accounts previously written off is P50,000. Accounts receivable balance on December 31 is P1,900,000. As part of year-end adjusting entries, what amount should be debited to Bad debts expense at year end
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.
BT21 Company prepared an aging of
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