Question
To clarify, when you calculate bad Debts expense as a percentage of Accounts Receivable, You have to consider the balance in the Allowance for bad
To clarify, when you calculate bad Debts expense as a percentage of Accounts Receivable, You have to consider the balance in the Allowance for bad debts expense. What needs to be done is to bring the Allowance for bad debts expense up to the amount of the estimate .
You need to modify your example below:
"Bad debts expense= percentage of bad debts x accounts receivables."To
Bad debts expense= percentage of bad debts x accounts receivable les/add the balance in the Allowance for Bad Debts expense .
Question for You:What isthe entry to write off an amount that is not going to be collected?
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