On 2019, an instalment sales account balance of 2008 was defaulted and the merchandise, with current market value of P15,000, was repossessed. The account balance defaulted was P24,000. 17. The gross profit rate in 2019? a. 30% b. 40% c. 35% d. 45% 18. The balance of the deferred gross profit account as at the end of 2019 was a. 218,400 b. 228,000 c. 275,000 d. 450,000 19. How much is the gain or loss on repossession? a. Gain P600 b. Loss P1,800 c. Loss P9,000 d. Gain P1,800
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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