Account Describe How Accounts Receivable Essay

Total Length: 372 words ( 1 double-spaced pages)

Total Sources: 2

These accounts act as a crosscheck of the accuracy of the subsidiary accounts. The general ledger will only include the total amount of accounts payable or accounts receivable. The subsidiary ledgers will give you the specifics of each entry (who, how much, how often) that makes up the total found in the general ledger.

Allowance account is basically a contra asset account which reduces the balance of accounts receivable that a company is likely to collect. The allowance account is a contra account to accounts receivable, the actual bad debts of $35,000 are debited to the allowance account as they are written off. The expense recorded in the statement of comprehensive income therefore represents the balance-day adjustment upon assessment of the recoverability of the accounts receivable.
It includes the amount that is unlikely to be collected. While analyzing the amount that the company is likely to collect there is a particular percentage that is unlikely to be collected and the same reduces the balance of accounts receivable. It helps in bringing a realistic picture….....

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