ounts Receivable and estimated uncollectible percentages revealed the following: 1-30 days $120,000 1% 31-60 days $80,000 3% 61-90 days $20,000 8% Over 90 days $8,000 40% The Allowance for Uncollectible Accounts had a credit balance before adjustment of $2,000. Under the aging-of-receivables method, the uncollectible-account expense fo he year is:
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.
Under the aging of receivables method, the amount for estimated uncollectible accounts receivables in the current period is calculated and allowance for the same is made in excess of the opening balance of allowance of uncollectible account receivable.
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