QS 7-6 (Algo) Allowance method for bad debts LO P2 Gomez Corporation uses the allowance method to account for uncollectibles. On January 31, It wrote off an $1,300 account of a customer, C. Green. On March 9, It receives a $800 payment from Green. 1. Prepare the journal entry for January 31. 2. Prepare the journal entries for March 9; assume no additional money is expected from Green. View transaction list Journal entry worksheet < 1 2 Record the write-off of Green's $1,300 account. Date January 31 3 Note: Enter debits before credits. Record entry General Journal Clear entry Debit Credit View general journal
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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