Jay Shah has the following balances as of 31 December in the accounts 45 300 3 000 70 000 400 250 350 550 Equity Motor vehicle Building Office furniture A Smith (accounts receivables) J Andrews (Accounts payables) T Williams (Accounts payables) G Woodley ((accounts receivables) Purchases returns Bank Electricity Business rates and taxes Rent Wages Long-term loan Revenue Purchases 150 500 3 600 1400 1800 1 600 3 500 9 000 100 000 70 000 Required i. Prepare Jay Shah's trial balance as at 31 December. ii. An indication of which balances are assets, liabilities, equity, income and expenses.
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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