Sunshine Company prepared the following partial aging schedule for its accounts receivable for the year 2020 Not Yet Due Number of Days Past Due Customer Total 1-30 31-60 61-90 Over 90 Mario $400 $200 S(A) 222 Joseph 100 200 $350 650 Ahmad 100 150 400 100 750 Total $100 22? 222 $300 (B) $2,200 Estimated percentage 1% (C) 10% 20% 50% Estimated Bad Debt 222 299 $42 222 222 222 Missing amount (A) is equal to: $1,400 $600 $200 $0 None of the above
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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