On June 30, N, considering the customer's purchasing pace, the entity deduces that the customer will indeed reach the target of 75 units. April: 10 units May: 12 units June: 10 units Work to be done: How do these new orders change the assumptions that the entity made when recognizing revenue in the first quarter? Calculate the adjustment to the amount of revenue that the entity will have to recognize on the first quarter revenue Calculate the 2nd quarter revenue based on the new assumptions.
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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