The following accounts were abstracted from Todd Company's unadjusted trial balance at December 31: Accounts Receivable Allowance for Doubtful Accounts Net Credit Sales Select one: Todd Company estimates that 2% of net credit sales will become uncollectible. After adjustment at December 31, the Bad Debt Expense should have a balance of: a. $26,000 Debit $800,000 b. $60,000 Oc. $70,000 d. $32,000 e. $86,000 Credit 10,000 $3,000,000
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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