The following information was taken from the books of Buttercup Dealers at 28 February 2020 before any adjustments or closing entries had been made. Credit losses recovered R1 950.00 Trade debtors (1 March 2019) R78 175.00 Allowance for credit losses R3 512.50 Credit sales R101 250.00 Cash sales R31 875.00 An amount of R425 must be written off as irrecoverable. The allowance for credit losses must be adjusted to 5% of outstanding debtors. Which one of the following amounts represents the net amount in respect of debtors to be disclosed in the statement of financial position of Buttercup Ltd at 28 February 2020?
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 information was taken from the books of Buttercup Dealers at 28 February 2020 before any adjustments or closing entries had been made. Credit losses recovered R1 950.00 Trade debtors (1 March 2019) R78 175.00 Allowance for credit losses R3 512.50 Credit sales R101 250.00 Cash sales R31 875.00 An amount of R425 must be written off as irrecoverable. The allowance for credit losses must be adjusted to 5% of outstanding debtors. Which one of the following amounts represents the net amount in respect of debtors to be disclosed in the
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