Brief Exercise 7-04 Presented below is information related to Sunland Company for its first month of operations. Credit Sales Cash Collections Jan. 7 Austin Co. $11,600 Jan. 17 Austin Co. $7,500 15 Diaz Co. 7,200 24 Diaz Co. 4,500 23 Noble Co. 10,000 29 Noble Co. 10,000 Identify the balances that appear in the accounts receivable subsidiary ledger and the accounts receivable balance that appears in the general ledger at the end of January. Subsidary Ledger General Ledger Austin Co. Diaz Co. Noble Co. Balance of 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.
Brief Exercise 7-04
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Credit Sales
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Cash Collections
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| Jan. 7 | Austin Co. | $11,600 | Jan. 17 | Austin Co. | $7,500 | |||||
| 15 | Diaz Co. | 7,200 | 24 | Diaz Co. | 4,500 | |||||
| 23 | Noble Co. | 10,000 | 29 | Noble Co. | 10,000 |
Identify the balances that appear in the
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Subsidary Ledger
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General Ledger
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Austin Co.
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Diaz Co.
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Noble Co.
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| Balance of Accounts Receivable |
$
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$
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$
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$
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