RGI Company had an accounts receivable balance of ₱45,000 on December 31, 2001, and ₱60,000 on December 31, 2002. The company wrote off ₱12,000 of accounts receivable during 2002, and collected ₱2,500 on an account written off in 2000. Sales for the year 2002 totaled ₱550,000. All sales were on account. The total collections from customers in 2002 were a. ₱535,000. c. ₱538,000. b. ₱523,000. d. ₱525,500
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.
RGI Company had an
December 31, 2002. The company wrote off ₱12,000 of accounts receivable during 2002, and collected ₱2,500 on an account written off in 2000. Sales for the year 2002 totaled ₱550,000. All sales were on account. The total collections from customers in 2002 were
a. ₱535,000. c. ₱538,000.
b. ₱523,000. d. ₱525,500
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