Concept explainers
(1)
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
Bad debt expense:
Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.
Allowance method:
It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method,
Write-off:
Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.
To journalize: The transactions using allowance method to estimate bad debts.
(2)
To show: The way in which net accounts receivable would be reported on the balance sheet as of January 31, 2018.
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ACC 201/202 MYACCLAB E-TEXT ONLY >I<
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