Swaziland Company provided the following year-end data: 2021 2020 Accounts receivable P175,000 P129,000 Allowance for doubtful accounts -10,000 -15,000 Net realizable value P165,000 P114,000 Additional information: The entity reported doubtful accounts expense in 2021 of P18,000 and had products returned for credits totaling P9,600 at a sale price. The Gross sales for 2021 amounted to P1,375,000. The entity written-off P23,000 accounts during the year. How much was collected from customers during 2021?
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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