Question Eight Inter Company had the following accounts from the adjusted trial balance at June 30, 2020: Supplies $500 Accounts Receivable $3,900 Retained Earnings 800 Unearned Service Revenue 200 Service Revenue 5,600 Accounts Payable 800 Cash 3,200 Supplies Expense 2,300 Miscellaneous Expense 300 Rent Revenue 500 Salaries and Wages Payable 400 Salaries and Wages Expense 1,800 Dividends 300 Share Capital-Ordinary 4,000 Required: a) Prepare closing entries at June 30, 2020. Date Accounts titles and explanation Debit Credit
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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