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Jury Instruction Cash Expenditures Method Form

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Instructions and help about Jury Instruction Cash Expenditures Method

Hey! I'm Jonathan Wild, and we are going to cover how to use the allowance method. Now, it's common in business to allow customers to pay for products or services at a later date, called selling "on credit". Unfortunately, some of those customers won't pay us back. using the allowance method, we estimate these losses from uncollectible accounts and record bad debts expense at the end of the accounting period. So, let's do an example. Assume we had credit sales of $900,000 in our first year of business and at the end of the first year, $80,000 of those credit sales have not yet been collected We expect most of these accounts receivable to be collected, but unfortunately, we estimate that $6,000 will be uncollectible. We cover how to estimate this in other videos, but for now let's record this estimate by debiting Bad Debts Expense for 6,000 and crediting Allowance for Doubtful

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