If uncollectible accounts are determined by the aging-of-receivables method to be $1,240, the uncollectible-account expense for 2014 would be OA. $140 OB. 5760 OC. $1,240 OD. $1,100.
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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![Gregory Company had the following information in 2014
Accounts receivable 12/31/14.
9,000
Allowance for uncollectible account 12/31/14 (before adjustment)
1,100
Credit sales during 2014.
38,000
Cash sales during 2014
15,000
Collections from customers on account during 2014
51,000
If uncollectible accounts are determined by the aging-of-receivables method to be $1,240, the uncollectible-account expense for 2014 would be
OA. $140.
OB. $760
OC. $1,240
OD. $1,100
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