The following information is related to December 31, 2024 balances. ● Accounts receivable Allowance for doubtful accounts (credit) ● Cash realizable value $1570000 (111000) 1459000 During 2025 sales on account were $375000 and collections on account were $230000. The company wrote off $23000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectibles should be estimated at $144000. The change in the cash realizable value from 12/31/24 to 12/31/25 was
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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