Accounts Receivable on 31 December and a year prior to it were P764,260 and P695,480 respectively. During the year sales, amounts received from customers and bad debts written off were P5,432,840, P5,288,540 and P16,720 respectively. Sales Discount amounted to P229,800 P58,800 P5,374,040
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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