At the end of January, the unadjusted trial balance of Valuepoint, Inc. included the following accounts: Debit Credit Sales (90% represent credit sales) P 800,000 Accounts Receivable P 550,000 Allowance for Doubtful Accounts 4,280 Valuepoint uses the statement of financial position approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be P16,600. The amortized cost of Valuepoint's accounts receivable in the January 31 statement of financial position is: a. P 533,400 b. P 545,720 c. P 529,120 d. P 537,680
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.
At the end of January, the unadjusted
Debit Credit
Sales (90% represent credit sales) P 800,000
Accounts Receivable P 550,000
Allowance for Doubtful Accounts 4,280
Valuepoint uses the
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