Traffic Busters, Inc. delivers documents and other small items to intercity offices via bicycle couriers. They had the following account balances at December 31: Accounts payable Accounts receivable Advertising expense Bicycles Cash Common stock Delivery service revenue Insurance expense 8,000 16,200 1,600 10,150 26,505 20,000 47,030 3,500 11,500 Notes payable Prepaid insurance Supplies Wages expense Prepare an unadjusted Trial Balance in proper form. Accounts 1,500 1,850 25,225 Traffic Busters Inc Unadjusted Trial Balance December 31, 2012 Debits Credits
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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