The following balances have been excerpted from Chlorine's Statement of Financial Position for the year: Accounts receivable, increase 0, Accounts payable, decrease Accounts written-off Cash payment to trade creditors Cash purchases Cash received from customers including recoveries Cash sales Notes payable - bank, increase Notes payable - trade, increase Notes receivable, decrease Purchase discounts Purchase returns (P120,000 was refunded from the supplier) Recovery of accounts written-off Sales discounts Sales return (P200,000 was refunded to the customer) P1,480,000 600,000 240,000 4,800,000 1,000,000 6,000,000 1,200,000 1,200,000 800,000 800,000 140,000 320,000 72,000 80,000 320,000
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.
1. What is the amount of gross sale on account?
2. What are the total gross sales?
3. What are the total net sales?
4. What are the correct gross purchase on account?
5. What are the gross purchase?
6. What are the net purchases?
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