The allowance for doubtful debts account had a debit opening balance of $1,000 before bad debts of $900 were written off. If the allowance was adjusted to 5% of the accounts receivable balance of $44,000 inclusive GST, at the end of the period, the new amount of the allowance for doubtful debts that is deducted from accounts receivable in the balance sheet is $__________. Group of answer choices 2,200 2,100 2,000 3,000
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.
Hh4.
Account
The allowance for doubtful debts account had a debit opening balance of $1,000 before
2,200
2,100
2,000
3,000
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