As at 30 March 2020 , the accounts receivable balance is $10,000. The allowance for doubtful account balance is $200(credit balance). The management determined to write off an accounts receivable of $400 and accounting entries (following IFRS) were recorded on 30 March 2020. At 31 March 2020. The management estimated that 8% of the outstanding accounts receivable balance is uncollectible. The adjusting entries for bad debt expense to be prepared on 31 March 2020 is $____________. (Assumption: the company prepares the financial statements on an annual basis)
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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As at 30 March 2020 , the accounts receivable balance is $10,000. The allowance for doubtful account balance is $200(credit balance).
The management determined to write off an accounts receivable of $400 and accounting entries (following IFRS) were recorded on 30 March 2020.
At 31 March 2020. The management estimated that 8% of the outstanding accounts receivable balance is uncollectible. The
adjusting entries forbad debt expense to be prepared on 31 March 2020 is $____________.(Assumption: the company prepares the financial statements on an annual basis)
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