CBC has accounts receivable at year end 620,000.00 Balance in allowance for doubtful accts 12,400.00 credit balance Sales on account for the year were 868,000.00 The company uses the % of receivables allownace method for bad debt Prepare the journal entry for bad debt expense at year end if 3% is the expected bad debt
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.
1.
| CBC has |
620,000.00 | |||
| Balance in allowance for doubtful accts | 12,400.00 | credit balance | ||
| Sales on account for the year were | 868,000.00 | |||
| The company uses the % of receivables allownace method for |
||||
| Prepare the |
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