Sales (all on credit), P600,000 Accounts receivable, P100,000 Allowance for uncollectible accounts, P3,000 Assume aging of accounts revealed that allowance of P10,000 is needed to take care of possible uncollectible accounts. Assume further that the allowance has a debit balance before adjustment. Uncollectible accounts expense is equal to:
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.
20.
Sales (all on credit), P600,000
Allowance for uncollectible accounts, P3,000
Assume aging of accounts revealed that allowance of P10,000 is needed to take care of possible uncollectible accounts. Assume further that the allowance has a debit balance before adjustment. Uncollectible accounts expense is equal to:
Step by step
Solved in 2 steps
