Using the Allowance method supply the journal entries to bring back the written off Account Receivable and the payment for it. Accounts Debit Credit 02/10- Bad Debt Expense $150.00 Allowance for Doubtful Accounts $150.00 Estimate of uncollectibles 02/28- Allowance for Doubtful Accounts $350.00 Accounts Receivables- CFI $350.00 To Write-off CFI Account Direct Write-off Method Accounts Debit Credit 01/12- Bad Debt Expense $450.00 Accounts Receivables- CFI $450.00 To write-off CFI account
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 Allowance method supply the
Accounts Debit Credit
02/10-
Allowance for Doubtful Accounts $150.00
Estimate of uncollectibles
02/28- Allowance for Doubtful Accounts $350.00
Accounts Receivables- CFI $350.00
To Write-off CFI Account
Direct Write-off Method
Accounts Debit Credit
01/12- Bad Debt Expense $450.00
Accounts Receivables- CFI $450.00
To write-off CFI account
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