Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period: a. a. C. b. C. d. e. b. $ d. $ e. $ Merchandise Invoice Amount $20,000 12,000 6,000 4,400 2,400 Freight Paid by Seller $500 - 200 FOB destination, n/30 FOB shipping point, 2/10, n/30 FOB shipping point, 1/10, n/30 FOB shipping point, 2/10, n/30 FOB destination, 1/10, 1/30 Customer Returns and Allowances $1,000 1,400 500 600
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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