during 2022, P23,000 Accounts receivable at 12/31/22, P375,000 Uncollectible accounts recovered during 2022, P5,000 Total provisions made during 2022, P12,000 Statement 1: The amount of bad debts expense in 2
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.
5.
AA Company prepared an aging of its
Allowance for uncollectible accounts at 1/1/22 – credit balance,P34,000
Accounts written off as uncollectible during 2022, P23,000
Accounts receivable at 12/31/22, P375,000
Uncollectible accounts recovered during 2022, P5,000
Total provisions made during 2022, P12,000
Statement 1: The amount of
Statement 2: The ending balance of the allowance for uncollectible accounts is P25,000.
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