Which of the following statements is FALSE? An entry to write off an uncollectible account does not change the net realizable value of AR. Recording bad debt expense will affect total assets. The maturity value of a note is it’s principal plus interest. A credit memo will reduce a company's cash balance. If a company's accounts receivable are a material amount, the company must use the allowance method. A. В. С. D. Е.
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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