On april 25, foreman electric install wiring in a new home for 2300 on account. However on april 27 foreman's electrical work does not pass inspection, foreman grants the customer on allowance of 480 because of the problem. The customer makes full payment of the balance owned on april 30 Record the journal entries
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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