QUESTION 15 Jim's Auto Body Shop uses the aging of accounts receivable method for estimating uncollectible accounts. Before making adjusting journal entries, the April 30th balance in the allowance for uncollectible accounts, was $4,300 credit. After reviewing the Accounts receivable aging schedule, the amount of uncollectible accounts was estimated to be $15,300. What was the bad debt expense for the period ending April 30th ? $12,000 $11,000 $10,000 $9,000
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.
Vishnu
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