AFM101 Lecture Notes - Lecture 12: General Ledger, Market Liquidity, Accounts Receivable

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If we look at the t-account of afda (assume the total uncollectible amount is and the current afda balance is ): 70 = 100 - 30 the (cid:271)ad de(cid:271)ts expense / adjusting entry required to bring the current. 100 the desired afda balance by the end of the period: record the adjusting entry by debiting bad debts expense and crediting afda. If we use the example above: bad debts expense: +70, afda: +70, corporation x has to journalize their bad debts expense using the aging-of-receivables method with a current afda balance of and the given accounts: : bad debts expense = - = . Uncollectible amounts: corporatio(cid:374) x de(cid:272)lared that custo(cid:373)er e"s a(cid:272)(cid:272)ou(cid:374)t (cid:449)ith a de(cid:271)it (cid:271)ala(cid:374)(cid:272)e of is u(cid:374)(cid:272)olle(cid:272)ti(cid:271)le. 200: no impact on current assets, total assets, or net accounts receivable because afda and.

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