Q: What are the journal entries for the following transactions related to Uncollectable accounts? On January 31st, accounts receivable amount to Rs=10,000. On this date, the credit manager reviews the accounts receivable and estimates that approximately Rs=850 of these accounts will prove to be uncollectable. Assume that the customer (Ali enterprise) is gone out of business and Rs=300 account receivable from the customer is now worthless. Assume for example, that a past-due account receivable in the amount of Rs=150 from XYZ was written off on March 16, 2020. All of a sudden, XYZ pays the account in full. Record the journal entry.
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.
Q: What are the journal entries for the following transactions related to Uncollectable accounts?
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- On January 31st,
accounts receivable amount to Rs=10,000. On this date, the credit manager reviews the accounts receivable and estimates that approximately Rs=850 of these accounts will prove to be uncollectable. - Assume that the customer (Ali enterprise) is gone out of business and Rs=300 account receivable from the customer is now worthless.
- Assume for example, that a past-due account receivable in the amount of Rs=150 from XYZ was written off on March 16, 2020.
- All of a sudden, XYZ pays the account in full. Record the
journal entry .
- On January 31st,
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