Using the aging approach, management estimates that10%of the$10,000of Accounts Receivable will be uncollectible. The Allowance for Doubtful Accounts has a$100unadjusted debit balance. After the bad debt adjusting entry is recorded, Bad Debt Expense on the income statement will be the Allowance for Doubtful Accounts on the balance sheet. Multiple Choice$100less than$100more than the same amount as$9,900more than
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.
Using the aging approach, management estimates that10%of the$10,000of
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