If an amount box does not requi inventory system is used. Mar. 5 Mar. 9 Mar. 13 II II I II II I
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.
Journal Entry:
Journal entry has two effects for every transaction. The journal entry is passed by first finding the type of account and the applying the golden rules of that type of account. Real account’s golden rules are Debit what comes in Credit what goes out. Personal accounts golden rule is Debit the receiver Credit the Giver. Nominal account rule is Debit all Expenses and losses Credit all Incomes and gains.
Step by step
Solved in 2 steps with 1 images
