Show a journal entry writing off an account using both the allowance method and the direct write-off method. NOTE: YOU CAN INCLUDE ANY AMOUNTS AS LONG AS THEY MAKE SENSE, BUT DO NOT FORGET TO INCLUDE ACTUAL NUMBERS FOR THIS JOURNAL SHOWING BOTH METHODS AS STATED ABOVE. THIS CAN BE MADE UP BUT DO NOT FORGET THE NUMBERS.
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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