Indiana Bones, Inc., has the following account balances at the end of the year before adjustments: Accounts Receivable $60,000 Allowance for Doubtful Accounts $800 credit balance Sales $900,000 Doubtful Accounts Expense 0 Management estimates that 11% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, Doubtful Accounts Expense on the income statement for the year equals:
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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.
Indiana Bones, Inc., has the following account balances at the end of the year before adjustments:
|
|
$60,000 |
|
Allowance for Doubtful Accounts |
$800 credit balance |
|
Sales |
$900,000 |
|
Doubtful Accounts Expense |
0 |
Management estimates that 11% of accounts receivable will be uncollectible. After the correct
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