Identifies errors in the following check balance according to the data presented. Terran Restaurant Check balance At the end of March 2020 Account Debit Credit cash 584,000 accounts receivable 210,000 eguipment 140,000 supplies 18,000 accounts pavable 43,000 John Roman, capital 632,000 fee earmed rent expense 20,000 salary expense 280,000 Total 1,320,000 1,320,000
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.
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