Question

A company’s sales for the months of June and July are N$380000 and N$420000 respectively. For the same months the company recorded net profits amounting to N$24000 and N$40000 respectively. There is no change in contribution/sales ratio or fixed costs. Calculate the company’s contribution/sales ratio

Answer 1

Answer:

To predict your company's bad debts, you must create an allowance for doubtful accounts entry. ... When a doubtful debt turns into a bad debt, you will need to credit your accounts receivable account. This decreases the amount of money owed to your business. You must also debit your allowance for doubtful accounts.