Which one of the following is the correct presentation of Accounts Receivable and its contra account on the balance sheet? Accounts Receivable $642,000 (17,000) (2,000) Less: Bad Debt Expense Less: Allowance for Doubtful Accounts $623,000 Accounts Receivable $642,000 Less: Allowance for Doubtful Accounts (2,000) $640,000 Accounts Receivable $642,000 Plus: Allowance for Doubtful Accounts 2,000 $644,000 Accounts Receivable $642,000 Less: Bad Debt Expense (17,000) $625,000 ck if you would like to Show Work for this question: Open Show Work
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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