When an uncollectible account is recovered after it has been written off, he company should record the journal entries: O debit Accounts Receivable and credit Allowance for Doubtful Accounts; debit Account receivable and credit Cash O debit Allowance for Doubtful Accounts and credit Account receivable; debit Cash and credit Account receivable. O debit Allowance for Doubtful Accounts and credit cash; debit Bad Debts Expense and credit Account receivable. Odebit Account receivable and credit to Allowance for Doubtful Accounts; debit Cash and credit Account receivable.
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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