What are the three classifications of receivables? Which does your company have? Look in the notes to the financial statement to find out which method they use for writing off receivables.
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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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Assignment Details
FINANCIAL ACCOUNTING II 1221_ACC1112_OL2
What are the three classifications of receivables?
Which does your company have? Look in the
notes to the financial statement to find out which
method they use for writing off receivables.
Part 2
Dan's Hardware is a small hardware store in the
rural township of Twin Bridges. It rarely extends
credit to its customers in the form of an account
receivable. The few customers who are allowed to
carry accounts receivable are long-time residents
of Twin Bridges with a history of doing business
at Dan's Hardware. What method of accounting
for uncollectible receivables should Dan's
Hardware use? Why?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F22fc8187-55de-46ed-8d58-0e3c420fbc17%2Fdb464781-6b25-481a-9c01-bdd1b9524546%2Fkm0442s_processed.jpeg&w=3840&q=75)
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