The following data were extracted from company 'XYZ's records: Details 2009 2008 •• Debtors-gross 530,000 140,000 Bad debt provision expense 78,000 28,000 i) Show the journal entries that will be passed in the company's books with respect to the bad debt provision expense
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.
The following data were extracted from company 'XYZ's records:
|
Details |
2009 |
2008 •• |
|
Debtors-gross |
530,000 |
140,000 |
|
|
78,000 |
28,000 |
i) Show the
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