The following imontation pertam Credit Sales Accounts Payable Accounts Receivable Allowance for Decollectible Accounts Wple Choice O Lightning uses the aging method and estimates it will not collect 7% of accounts receivable not yet due, 17% of receivables up to 30 days past due, and 43% of receivables greater than 30 days past due. The accounts receivable balance of $8.800 consists of $5,000 not yet due, $2.000 up to 30 days past due, and $1800 greater than 30 days past due What is the appropriate amount of Bed Debt Expense? O O $400 1340 $1064 $20,000 10,000 8,800 SHE 400 credit 20,000
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.
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