1. Which method of reco accrual accounting? a. Allowance method b. Direct writeoff method c. Percent of sales method 2. When the allowance method is used, the entry to record the writeoff of a specific account would Decrease both accounts receivable and the allowance b. Decrease accounts receivable and increase allowance c. Increase both accounts receivable and the allowance d. Increase accounts receivable and decrease the allowance - Under the allowance method, the journal entry to recorc the writeoff of a specific uncollectible account a. Affects neither net income nor working capital b. Affects neither net income nor accounts receivable c. Decreases both net income and working capital d. Decreases both net income and accounts 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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