At the end of its first year of operations, December 31, 2021 Nickle Inc. reported the following information: Accounts receivable, net of allowance for doubtful accounts P 9,500,000 Customer accounts written off as uncollectible during 2021 240,000 Bad debt expense for 2021 840,000 What should be the balance of accounts recievable mat December 31, 2021 before substracting allowance for doubtful accounts? A. P 10,100,000 B. P 9,740,000 C. P 10,340,000 D. P 10,580,000
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.
At the end of its first year of operations, December 31, 2021 Nickle Inc. reported the following information:
|
Accounts receivable, net of allowance for doubtful accounts |
P 9,500,000 |
|
Customer accounts written off as uncollectible during 2021 |
240,000 |
|
|
840,000 |
What should be the balance of accounts recievable mat December 31, 2021 before substracting allowance for doubtful accounts?
A. P 10,100,000
B. P 9,740,000
C. P 10,340,000
D. P 10,580,000
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