Question

D.Q. 4.2. Discuss uncollectible accounts. What factors lead to accounts being uncollectible? What options do businesses have when accounts become uncollectible?

Answer 1

- Answer Accounts that ass impublished ass cmlikely to pay off as income or debt. There are a number of reasons why a loan cem be found, inclucling failure to find a borrower, coun fraud or having the proper clocumentation to prove that the loan is in reality. Reporting of indiviclucl culowance account together with physical accounts. Buch debt costs should be in proportion and should be de corcled in the relevant sales income record over a period of time. create the adjust acliusting entry needed to get the net variable vame and collect the resulting bad debt toteil.

SA when a customer buys an item on credit with his or her daily seller, the amount that the customer receives is recorded accounting to those accounts. The payment terms are different, if a customer coes not pay on time, he would classify this amount ces a drumming account, At this point, the company may choose to charge the loan in the form of a provision once the company has realized that the buel loan will not be paid, the amount for suspected accounts cou'll be deposited with the clebit journal entry to be depositeel in the clebit account, How does a loan apreet a business's cassets? Unfortunately, no amount cem be collected on the account. So customers break up, get angry and refuse to pay. Therefore, the

company generully has legal meems to collect such accounts. But often do not succeed as a result, esteebii. Shing a deporting cuccounting process is difficult. That is why such un published accounts are called. bad debts'. Whenever a company fails to pay on time, its account breaks clown into overdue. over time, such an accoumt becomes um manugeble ifit is not yet paida Bused on experience, a compomy estimates weighted accounts, And the company maintains its unzestricted accounts, compemies cem reduce the accounts of such entities without disruption. commercices companies often find out about each other recluce communication through various means

by spreading rumors or word of mouth. And poor companies are generally poor creditors.