Concept explainers
(a)
Allowance method
It is a method for accounting
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
Write-off:
Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.
To journalize: The collection of $1,200 cash and write-off of Person M’s $4,000 of remaining uncollectible accounts, using allowance method.
(b)
To reinstate: The account of Person M and record the collection of cash on account.
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Chapter 8 Solutions
Working Papers, Volume 1, Chapters 1-15 for Warren/Reeve/Duchac's Corporate Financial Accounting, 13th + Financial & Managerial Accounting, 13th
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