Marin has been in business several years. At the end of the current year, the unadjusted trial balance shows: Accounts Receivable Sales Revenue Allowance for Doubtful Accounts $317,900 Dr. 2,106,400 Cr. 6,083 Cr. Bad debts are estimated to be 8% of receivables. Prepare the entry to adjust Allowance for Doubtful Accounts. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
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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