Complete the following the statement by choosing the correct word from the dropdown menu. "Introduced in Chapter 7, "Allowance for Doubtful Accounts" (AfDA) is an account used in adjusting entries to adjust for bad debts for the accounting period. It is a contra [Select ] account linked to Accounts Receivables, and [Select] therefore has a ✓balance. When AfDA has a debit balance, more accounts have been written off for the year than estimated, therefore when completing the adjusting entry using the percent of [Select] methods, be sure the resulting balance in AfDA is a credit balance."
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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![Complete the following the statement by choosing the correct word from the
dropdown menu.
"Introduced in Chapter 7, "Allowance for Doubtful Accounts" (AfDA) is an account
used in adjusting entries to adjust for bad debts for the accounting period. It is a
contra [Select]
✓account linked to Accounts Receivables, and
therefore has a [Select]
balance. When AfDA has a debit
balance, more accounts have been written off for the year than estimated, therefore
when completing the adjusting entry using the percent of
[ Select]
✓methods, be sure the resulting balance in AfDA is a
credit balance."](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffe2257a7-ec8b-4cb2-8972-c13e17aa7768%2F2632e264-f62c-466a-8f72-6fb4338df752%2Fd3o7uyb_processed.png&w=3840&q=75)
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