The following accounts were included n Angels Consultants post-closing trial balance at December 31, 2021: Accounts Payable Accounts Receivable 2,000 5,500 Cash 11,000 Angels Capital 40,000 Angels Drawing 10,000 Interest Expense 3,000 Note Payable, due 8/31/2023 60,000 Supplies 1,000 Service Revenue 39,000 Equipment 5,000
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.
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