MGM Mirage—Accounts Receivable

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Why did MGM Mirage record a negative provision for doubtful accounts in ? The provision for doubtful accounts, an operating expense, increases the allowance for doubtful accounts.

MGM Mirage-Accounts Receivable Case Solution & Analysis

Each year, MFM Mirage estimated provision for doubtful accounts based on specific review of customer accounts. When a bad debt actually occurs, that is known as bad debt expense, an adjustment entry is made. In income statement, the provision is reduced to the extent of bad debt expenses. When some customers recover their bad debts, and journal entry is made to debit the receivables account as well as credit the provision account. In Exhibit 3 income statement, the negative provision for doubtful accounts in is the recovery of bad debts expenses.

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Mgm Mirage—Accounts Receivable Essay - Words | AntiEssays

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