How should accounting errors discovered in the same accounting period they relate be correct. For example, during year 2021, ABC corporation discovered an error in March of 2021 where an expense was debited instead of a fixed asset. How should the error be corrected O Wait until following year to correct the error O Correct the error using prior year in this case 2020. O Reverse the erroneous entry and post the correct entry as soon as the error is discovered, in this this case in the year 2021 O Do nothing, it will self correct
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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