On December 31 of the current year, Jerome Company has an accounts receivable balance of $321,000 before any year-end adjustments. The Allowance for Doubtful Accounts has a $1,300 credit balance. The company prepares the following aging schedule for accounts receivable: 31-60 Total Balance days $83,000 $321,000 Percent uncollectible 2% What is the Allowance for Uncollectible Accounts at December 31 of the current year after adjustments? O A. $1,300 OB. $10,880 OC. $9,580 O D. $12,180 61-90 days $57,000 4% 1-30 days $154,000 1% over 90 days $27,000 20%
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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