The activity in the credit card account of Mara for one billing period shows the following transactions: November 18 purchase of P 4,500.00; November 25 purchase of P23,000.00; December 3 payment of P30,000.00 and December 10 purchase of P8,430.00. (1.) Find the average daily balance on the next billing date of December 23 if the previous balance was P 5,900.00. Given the finance charge of 2.25% on the daily balance. (b) Find the finance charge and the balance owned on December 23.
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.
The activity in the credit card account of Mara for one billing period shows the following transactions: November 18 purchase of P 4,500.00; November 25 purchase of P23,000.00; December 3 payment of P30,000.00 and December 10 purchase of P8,430.00. (1.) Find the average daily balance on the next billing date of December 23 if the previous balance was P 5,900.00. Given the finance charge of 2.25% on the daily balance. (b) Find the finance charge and the balance owned on December 23.
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