On August 1, 20x1, your company provided lawn service to Duke's Basketball Camp for $35.99. Mr. Duke paid you with a check immediately upon the completion of the service. When you looked at the Accounts Receivable Aging report at the end of the month, you noticed that Duke's Basketball Camp still had an open balance. Per review of the activity in Duke's account, what was wrong with the transaction on August 1?
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.
On August 1, 20x1, your company provided lawn service to Duke's Basketball Camp for $35.99. Mr. Duke paid you with a check immediately upon the completion of the service. When you looked at the
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