Entry for Uncollectible Accounts Performance Bike Co. has determined that the proper balance for the Allowance for Doubtful Accounts at December 31 is $23,727. Assume that the allowance for doubtful accounts for Performance Bike Co. had a debit balance of $4,270 as of December 31. Journalize the adjusting entry for uncollectible accounts as of December 31.
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.
Entry for Uncollectible Accounts
Performance Bike Co. has determined that the proper balance for the Allowance for Doubtful Accounts at December 31 is $23,727. Assume that the allowance for doubtful accounts for Performance Bike Co. had a debit balance of $4,270 as of December 31.
Journalize the
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
