On March 13, a Company Writes Off a Customer's Account

question 17

Essay

On March 13, a company writes off a customer's account of $3,800. On June 3, the customer unexpectedly pays the $3,800 balance. Using the allowance method, record the write-off on March 13 and the cash collection on June 3.

---

Definitions:

Direct Labor Hour

The amount of time spent by employees directly working on producing goods or services.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, used to manage labor costs more effectively.

Standard Rate

A predetermined cost or charge used as a benchmark in budgeting and pricing decisions.

Actual Rate

The real interest rate or cost rate applied in transactions, differentiating from theoretical or expected rates.