On December 31, 2020, Trivalence Mining Corp. had the following records relating to its Accounts Receivable and the Allowance for Bad Debts. The ending Accounts Receivable balance does not reflect Write-Offs or Recoveries. Beginning Allowance 245 Ending A/R Write offs 2450 368 Recoveries 172 Required: Calculate Net Accounts Receivable for the year ended December 31, 202 The company estimates that 11% of Accounts Receivable are likely to be uncollectible. 2089 2334 2205 2006 1853
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.
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