The ABC Co disclosed the following data at Dec 31, 20X1: Account known to be worthless, P37,500 Advance payment to creditors on purchase orders P50,000 Customers accounts (credit balance due to returns), P5,000 Advances to employees, P34,000 Trade receivable, P169,000 Other non trade receivables, P4,000 The amount of receivables at Dec 31, 20X1 is: 173,000 252,000 257,000 289,500
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.
Account known to be worthless, P37,500
Advance payment to creditors on purchase orders P50,000
Customers accounts (credit balance due to returns), P5,000
Advances to employees, P34,000
Trade receivable, P169,000
Other non trade receivables, P4,000
The amount of receivables at Dec 31, 20X1 is:
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