The Benson Corporation Accounting Events 2024-2025

Explanation of Accounting Events

June 12, 2024: The Benson Corporation provided services to customers on account, totaling $33,800. This transaction represents revenue earned by the business.

September 17, 2024: The company received $19,000 from customers on account. This indicates a partial collection of accounts receivable, demonstrating the flow of cash into the company.

December 31, 2024: As of the year-end, the Benson Corporation estimated that 40% of its accounts receivable will not be collectible. This estimation is a standard accounting practice to prepare for potential losses due to nonpayment.

Estimating uncollectible accounts helps businesses accurately reflect the true value of their accounts receivable and maintain financial stability. By recognizing and accounting for potential losses, companies like the Benson Corporation can make informed decisions to manage their finances effectively.