Allowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Oct. 2. Received $2,830 from William Pruitt and wrote off the remainder owed of $2,750 as uncollectible. If an amount box does not require an entry, leave it blank. accounts payable-william pruitt accounts receivable-william pruitt bad debit expense cash sales allowance for doubtful accounts Oct. 2 Dec. 20. Reinstated the account of William Pruitt and received $2,750 cash in full payment. Reinstate Collection
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.
Allowance Method
Journalize the following transactions, using the allowance method of accounting for uncollectible receivables:
Oct. 2. Received $2,830 from William Pruitt and wrote off the remainder owed of $2,750 as uncollectible. If an amount box does not require an entry, leave it blank.
accounts payable-william pruitt
accounts receivable-william pruitt
bad debit expense
cash
sales
allowance for doubtful accounts
| Oct. 2 | |||
Dec. 20. Reinstated the account of William Pruitt and received $2,750 cash in full payment.
| Reinstate | |||
| Collection | |||
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