Effective the current year, Jeff Company adopted a new accounting method for estimating the allowance for doubtful accounts at the amount indicated by year-end aging of accounts receivable. Allowance for doubtful accounts on January 1, 250,000 Provision for doubtful accounts during the current year (2% of credit sales of P10,000,000) 2,000,000 Accounts written off 205,000 Estimated uncollectible accounts per aging on December 31 220,000 After year-end adjustments, what is the doubtful accounts expense for current year? a. P220,000 b. P205,000
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.
Effective the current year, Jeff Company adopted a new accounting method for estimating the allowance for doubtful accounts at the amount indicated by year-end aging of
Allowance for doubtful accounts on January 1, 250,000
Provision for doubtful accounts during the current year (2% of credit sales of P10,000,000) 2,000,000
Accounts written off 205,000
Estimated uncollectible accounts per aging on December 31 220,000
After year-end adjustments, what is the doubtful accounts expense for current year?
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