On January 1, Five Star Services has the following balances: Accounts Receivable $24,000 (debit)
Bad Debts Expense $0
Five Star Services has the following transactions during January: Credit sales of $120,000, collections of credit sales of $86,000, and write-offs of $20,000. Five Star Services uses the direct write-off method. At the end of January, the balance of Accounts Receivable is ________.

Question

Quizplus · Accepted Answer

The balance of Accounts Receivable is calculated as follows: Starting balance ($24,000) + Credit sales ($120,000) - Collections ($86,000) - Write-offs ($20,000) = $38,000.

On January 1, Five Star Services Has the Following Balances