Practice 6: The following is an analysis of the bills discounted from the books of accounts of a AM Bank as at 31st December 2017 Bills discounted Rebate on bills discounted (1 January 2017) Discount Received Date of bills October 20 November 5 December 5 December 20 Amount RO 1,200,000 1,000,000 600,000 300,000 Term months 2 4 2 3 6,000,000 50,000 150,000 Discounted at % p.a 12 10 12 10 Required: Calculate the rebate on bills discounted for the above bills. •Pass the journal entries and Show the discount and interest and rebate on bills discounted account in the ledger books of bank.
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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