Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

If you have an AR balance as of the end of a Fiscal year and

Customer Question
the money is not collectable...
If you have an AR balance as of the end of a Fiscal year and the money is not collectable despite being recorded on the balance sheet as account receivable.

Is this still considered an Account Receivable?
and
What is the definition of an Account Receiable as it relates to GAAP?
Submitted: 7 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 14 hours by:
4/1/2010
Tax Professional: JKCPA, CPA replied 7 years ago
JKCPA
JKCPA, CPA
Category: Tax
Satisfied Customers: 5,884
Experience: CPA with tax experience.
Verified

Hello,

 

Thanks for your question.

 

No, it should not be considered an accounts receivable (A/R) if it has been determined the account is uncollectible. Once it is determined that the amount is uncollectible, steps must be taken to write the debt off as a bad debt. There are 2 methods of doing this: 1) Direct write-off method: Once the debt is determined to be uncollectible, the loss is recorded by debiting Bad Debt Expense and crediting A/R. or 2) Allowance Method: An estimate is made on the expected uncollectible accounts based on total sales made on credit/account or from total outstanding receivables. The estimate is entered as an expense and an indirect reduction in A/R through an allowance for doubtful accounts.

 

A/R is defined as claims held against customers and others for money, goods or services that are expected to be collected.

 

Hope this helps,

Best regards,

 

 

 

Ask Your Own Tax Question
Ask JKCPA Your Own Question
JKCPA
JKCPA
JKCPA, CPA
Category: Tax
Satisfied Customers: 5,884
5,884 Satisfied Customers
Experience: CPA with tax experience.

JKCPA is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
My question is: Is the foreign tax credit 100% Offset to the
Hi, my question is: Is the foreign tax credit 100% Offset to the Alternative Minimum Tax, if there are only foreign income? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
9th circuit allows "Unmarried Cohabitants Each Entitled To
9th circuit allows "Unmarried Cohabitants Each Entitled To Deduct Interest On $1,100,000 Mortgage Limit". https://www.forbes.com/sites/anthonynitti/2015/08/10/ninth-circuit-unmarried-cohabitants-each-… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Does California allow you to deduct your individual/solo
Does California allow you to deduct your individual/solo 401k contributions on your state taxes? How about contributions towards SEP IRA?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
The 2018 tax law will allow homeowners to deduct property
The 2018 tax law will allow homeowners to deduct property taxes and either income or sales taxes with a combined limit on these deductions being limited to no more than $10,000. What does this mean? w… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
I have a loss of $150,000 on sale of land held for
I have a loss of $150,000 on sale of land held for investment for more than 10 years. I have other gains on stock sales that are much less than the loss. My AGI for 2017 will be in the $50,000 range. … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
My son is divorced and the divorce agreement allows him to
My son is divorced and the divorce agreement allows him to claim 1 of his 3 daughters as a dependent for tax purposes. His ex-wife now claims that because of this he has to provide health insurance fo… read more
Carter McBride
Carter McBride
LLM
252 satisfied customers
What is the maximum allowances that I can claim if I am
Good afternoon! What is the maximum allowances that I can claim if I am single with one job? … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,282 satisfied customers
My son's baby mother allowing her mother to fill taxes for
my son's baby mother allowing her mother to fill taxes for his son and she didn't contribute any thing to his care and lives eleswhere.the child mother is on welfare and my son pays child support how … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
0n sale of personal resonance. What is tax on sale. I
I understand that if you lived in the home for at least two years . there is no tax on the sale.true or not… read more
abci168
abci168
Principal
27 satisfied customers
IS THE TRADE IN ALLOWANCE THAT WAS PAID TO PAY CHILD SUPPORT
IS THE TRADE IN ALLOWANCE THAT WAS PAID TO PAY CHILD SUPPORT AND NOT TO PAY THE TRADE IN VEHICLE DEBIT (NOTHING OWED) TAXABLE INCOME? Purchase of Vehicle $10,109.00 Gross Trade-In Allowance $(10,000.0… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
A divorce lawyer suggested that I may be allowed to file as
Hello, a divorce lawyer suggested that I may be allowed to file as single rather than married filing separately even though my divorce will not go through until next year because my husband deserted m… read more
abci168
abci168
Principal
27 satisfied customers
Energy Credits - Please confirm that energy tax credits have
Energy Credits -Please confirm that energy tax credits have expired at end of 2016. Are there any credits for residential HVAC for 2017 tax year?Thanks, JW… read more
abci168
abci168
Principal
27 satisfied customers
I have no idea which # of allowances to claim for federal
Hi... I have no idea which # of allowances to claim for federal and NY state taxes, and I don't know if I should file as Head of Household or Married Filing Jointly … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,282 satisfied customers
2 Questions: SALES TAX COLLECTED and GROUPON SALES Does
2 Questions: SALES TAX COLLECTED and GROUPON SALESDoes Sales tax get reported on the Corporate Tax Return (1120) as part of Gross Receipts or Sales?I just got an IRS bill because I did not include Sal… read more
abci168
abci168
Principal
27 satisfied customers
We are trying to figure out allowances to take on my
We are trying to figure out allowances to take on my husband's pension. Besides social security that will be our only income. … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Federal Tax Credit or NC Tax Credit For 2017, is there any
Federal Tax Credit or NC Tax CreditFor 2017, is there any type of tax credit for replacing a roof on a historical house (1870)? It is primary residence. They will either replace the roof or do "hydros… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
Are Uber drivers allowed to claim depreciation on their
Are Uber drivers allowed to claim depreciation on their cars? How about special allowance depreciation?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What type of deductions will be allowable if you had
What type of deductions will be allowable if you had hurricane expenses. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x