10 years later and i still found this vid helpful. It was absolutely frustrating for me because I was having such a hard time on figuring out one of the things for this, and your video demystified it
I watched all your 3 video's related to bad debt expense and the topic made it a bit clear to me now...thank you very much. You made the topic easy to understand!!!! i subscribed right away:)
Arjun Kataria Whenever an account is written off, Allowance for doubtful accounts is debited and Accounts receivable is credited. If too many accounts are written off during the year, it is possible for Allowance for doubtful accounts to go into a debit balance. When that happens, we know that the company did not estimate enough bad debt.
I'm working on some short chapters for these topics. You can also check out my website: AccountingInFocus.com. I have some short written tutorials there. Good luck with your class!
Hi Kristin, your teaching methodology beats all CPA reviews in the market, even those who claim to have an 88% pass rate. Great work. Do you have any paid course?
Sharan, Thank you for your comment. I do not have any paid courses at this time. Just the free content here and at AccountingInFocus.com. I will keep that in mind for the future though. Good luck with the exam.
Thank you for the clear explanation! I'm a bit confused as to what the unknown (number you solved for in the t-account) represents. Is it the bad debt expense that was incurred during the period but didn't necessarily record? And is the bad debt expense only recorded at the end of the period?
Hello, What would you do if you also had 1000 was written off as uncollectible and a total of 500 which was previously written off was recovered. How would that affect the bad debt account? So you have a beginning balance of 400(credit side of T account), you calculate and know your new allowance for doubtful account is 6910. Is the 500 a debit on the T account and the 1000 is a credit on the T account so now your bad debt expense = 6010? I just have a more complex question that includes a beginning balance, an amount that is written off and an amount that is recovered and they want us to find the bad debt expense but I am getting confused which is on which side of the t-account.
I watched your other Bad debt videos, sooooo helpful! Excellent job. I think I get it. If I am following balance sheet method and I have a T-account for Allowance for doubtful accounts I put the starting balance in which in my question stated its a credit so right side of T-account. Then I put the amount that is written off on left side of T-account, then amount that is recovered on right side of T-account. Then the bad debt amount is the amount I need to get to final total.
You always want to get the most up-to-date balance before doing your calculations. Once you have the account balance, figure out the amount for the adjusting entries.
Why is it that normally for the bad debt expense account it is debited, and for the allowance for doubtful accounts is credited? Is it bc allowance for doubtful accounts is an estimation?
It's because the allowance is a contra asset account which lowers the net value of accounts receivable. In order to lower the value, it must be the opposite normal balance, credit rather than a debit (which is the normal balance for an asset).
Please help me figure out return on assets and profit margin with this information: Bakely Company reports the following information (in millions) during a recent year: net sales, $12,832.1; net earnings, $382.2; total assets, ending, $5,186.9; and total assets, beginning, $4,302.1. (a) Calculate the (1) return on assets, (2) asset turnover, and (3) profit margin. (Round answers to 1 decimal place, e.g. 6.2% and 6.2.) My understanding is: return on assets is calculated by net income/avg total assets and Profit Margin is calculated by net income/net sales I was able to figure out the asset turnover with the information provided, but I cannot for the life of me figure out net income with the information that this problem gave me. Help!
6 years later and this video just helped me before my accounting exam. thank you for actually being a good teacher and making it simple to understand!
You're welcome!
10 years later and i still found this vid helpful. It was absolutely frustrating for me because I was having such a hard time on figuring out one of the things for this, and your video demystified it
and i am studying for my final exam, so I need as much help as I can get
I'm so glad this helped you.
Good luck!
Thanks so much. I got the final exam this arvo. I watched these three videos for bad debts. No panic no more. Appreciate it!
+K-Jay FANG I hope your exam went well. Thanks for commenting!
Thanks for the help! All three of these videos helped me more than two days of accounting class.
You're welcome. Thanks for the awesome comment.
Thank you!!! This problem has confused me for so long!! Your T-account explained a lot!! Thank you!!
+Neo Tong You're welcome. So glad I could help!
I watched all your 3 video's related to bad debt expense and the topic made it a bit clear to me now...thank you very much. You made the topic easy to understand!!!! i subscribed right away:)
I'm glad you found the videos helpful! Thank you for subscribing.
Thank you so much! The way that you explain the topic makes it very easy to understand.
Your welcome! Glad it was helpful!
How would Allowance for doubtful accounts have a debit balance? Thank you, this was super helpful for me as well
Arjun Kataria Whenever an account is written off, Allowance for doubtful accounts is debited and Accounts receivable is credited. If too many accounts are written off during the year, it is possible for Allowance for doubtful accounts to go into a debit balance. When that happens, we know that the company did not estimate enough bad debt.
Thank you for your tutorials! You've saved my business accounting class grade:)
+Trinda martin wolfe you're welcome! Glad I could help! You put in the hard work. Congratulations!
Awesome! Thank you. I understood you better than my teacher. :)
+Learning Jane You're welcome. So glad I could help!
thanks you explain it far better than my teacher and book!
+Alireza E You're welcome! So glad I could help. Sometimes the textbook makes these topics more confusing!
Exactly!
Hello there, why is it that we put bad debt expense on the right side if we need to debit it?
Because we don't debit it in all cases. Sometimes you must credit it.
Thank you so much! This was the exact problem that stumped me!
Thank you so much. I wish you were the author of our Accounting book!
I'm working on some short chapters for these topics. You can also check out my website: AccountingInFocus.com. I have some short written tutorials there. Good luck with your class!
Thank you!
This is a great resource--crystal clear!
So glad it was helpful!
Thank you that was very helpful and now i understand using the t accounts with the aging of accounts receivable method!
Adriano Suckow awesome! So glad I could help!
Hi Kristin, your teaching methodology beats all CPA reviews in the market, even those who claim to have an 88% pass rate. Great work. Do you have any paid course?
Sharan,
Thank you for your comment. I do not have any paid courses at this time. Just the free content here and at AccountingInFocus.com. I will keep that in mind for the future though. Good luck with the exam.
Thanks, first time that I look at this video...and it was great...thanks again
Priscila A I am glad you liked it. Thanks for commenting!
This helped me actually do my homework thank you so much
+ChristVII I'm so glad the video was helpful! Thanks for commenting.
You made this look easy! Thank you so much!
+Petra Walston You're welcome. I'm so glad you have a better understanding of the concept now!
Great tutorial!!! Clear and to the point
+Jue Ru Chen Thank you! I appreciate your comment.
Thank you for the clear explanation! I'm a bit confused as to what the unknown (number you solved for in the t-account) represents. Is it the bad debt expense that was incurred during the period but didn't necessarily record? And is the bad debt expense only recorded at the end of the period?
It's bad debt.
Bad debt is typically recording quarterly by public companies so they can have complete statements.
You are a great person!
Thank you!
Hello, What would you do if you also had 1000 was written off as uncollectible and a total of 500 which was previously written off was recovered. How would that affect the bad debt account? So you have a beginning balance of 400(credit side of T account), you calculate and know your new allowance for doubtful account is 6910. Is the 500 a debit on the T account and the 1000 is a credit on the T account so now your bad debt expense = 6010? I just have a more complex question that includes a beginning balance, an amount that is written off and an amount that is recovered and they want us to find the bad debt expense but I am getting confused which is on which side of the t-account.
I watched your other Bad debt videos, sooooo helpful! Excellent job. I think I get it. If I am following balance sheet method and I have a T-account for Allowance for doubtful accounts I put the starting balance in which in my question stated its a credit so right side of T-account. Then I put the amount that is written off on left side of T-account, then amount that is recovered on right side of T-account. Then the bad debt amount is the amount I need to get to final total.
You always want to get the most up-to-date balance before doing your calculations. Once you have the account balance, figure out the amount for the adjusting entries.
Thank you so much for the video and i find it very good and helpful!
+catpiano1 You're welcome! So glad I could help. Thanks for commenting.
Why is it that normally for the bad debt expense account it is debited, and for the allowance for doubtful accounts is credited? Is it bc allowance for doubtful accounts is an estimation?
It's because the allowance is a contra asset account which lowers the net value of accounts receivable. In order to lower the value, it must be the opposite normal balance, credit rather than a debit (which is the normal balance for an asset).
Can you explain please when we are taking % of A/R why we are arriving at ending balance of Allowance. I am just confused with the logic of it.
ahh I got it , Coz A/R includes the balance of previous period as well.
+M Nauman Yes! I'm glad you were about to figure it out! Way to go!
Thank you for the explanation!!
+Murat T you're welcome. Glad I could help!
Why didnt I find your channel in high school :(
At least you found them now!
great video ty
Thanks for watching.
Please help me figure out return on assets and profit margin with this information: Bakely Company reports the following information (in millions) during a recent year: net sales, $12,832.1; net earnings, $382.2; total assets, ending, $5,186.9; and total assets, beginning, $4,302.1.
(a) Calculate the (1) return on assets, (2) asset turnover, and (3) profit margin. (Round answers to 1 decimal place, e.g. 6.2% and 6.2.)
My understanding is: return on assets is calculated by net income/avg total assets and Profit Margin is calculated by net income/net sales
I was able to figure out the asset turnover with the information provided, but I cannot for the life of me figure out net income with the information that this problem gave me. Help!
+Trinda martin wolfe net earnings is another term for net income
awww, the use of multiple terms for one thing trips me up every time. Thank you!
+Trinda martin wolfe that's why it is important to treat accounting like a language course. Knowing the terminology is the secret to success
I wasn’t given the history or percentage not collected by the company,I was only given “makes all sales on a 30 days credit” I’m going bannanas 😡😡
you may need more info.
THANK YOU SO MUCH!!!!!
balty_7 You're welcome! Glad you found my videos helpful.
Brilliant.
+iamChronoz thank you!
The video is good but still need help 🙏🙏🙏
Check out more info on my website, Accountinginfocus.com
THANK YOU SO SO MUCH!!!
You're welcome!