At the End of the Year,a Company Has a Balance

question 133

Essay

At the end of the year,a company has a balance in Allowance for Uncollectible Accounts of $200 (credit)before any year-end adjustment.The balance of Accounts Receivable is $15,000.The company estimates that 10% of accounts receivable will not be collected over the next year.Record the adjustment for uncollectible accounts.

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Definitions:

Banking System

denotes the network of institutions that provide financial services, including deposits, loans, and currency exchanges.

Collection Float

The time difference between when a check is deposited into a bank account and when the funds are made available.

Availability Delay

The lag time between when a deposit is made into an account and when the funds become available for use.

Collection Float

The time difference between when a check is deposited into a bank account and when the amount is credited to the account, affecting the cash flow.