A company estimates that P20,000 of its P500,000 of accounts receivable will be uncollectible. Its Allowance for Doubtful Accounts presently has a beginning balance of P3,000. What is the credit loss that should be recognized at the end of the year?* P23,000 P20,000 P3,000 P17,000
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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