Use the following information for the next questions: A trial balance before adjustments included the following: Credit Sales ₱425,000 Sales returns and allowance Accounts receivable Allowance for doubtful accounts ₱14,000 53,000 760 9,000 Debit If the estimate of uncollectibles is made by taking 10% of gross account receivables, the amount of the adjustment is
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.
Use the following information for the next questions:
A
Credit
Sales
₱425,000
Sales returns and allowance
Allowance for doubtful accounts
₱14,000 53,000
760
9,000
Debit
If the estimate of uncollectibles is made by taking 10% of gross account receivables, the amount of the adjustment is
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