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ACCOUNTS RECEIVABLE AMOUNTS OWED TO A BUSINESS DUE TO RENDERING GOODS OR SERVICES ON CREDIT
ACCOUNTS RECEIVABLE PRESENTED ON THE BALANCE SHEET UNDER CURRENT ASSETS AT ITS EXPECTED REALIZABLE VALUE
JOURNAL ENTRIES NEEDED ACQUIRE ACCOUNTS RECEIVABLE ADJUST ACCOUNTS RECEIVABLE DISPOSE ACCOUNTS RECEIVABLE
JOURNAL ENTRY TO ACQUIRE ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLE XXX SALES XXX FOR HOW MUCH? DEPENDS ON WHETHER THE GROSS METHOD OR NET METHODS IS BEING USED
GROSS METHOD TO RECORD A CREDIT SALE GROSS METHOD ASSUMES DISCOUNT FOR PAYING EARLY WILL NOT BE TAKEN
EXAMPLE OF GROSS METHOD PAYMENT PAST DISCOUNT PERIOD SALE MADE FOR $100, DISCOUNT OF 3% IF PAID WITHIN 10 DAYS, PAID IN 14 DAYS ACCOUNTS RECEIVABLE $100 SALES $100 CASH $100 ACCOUNTS RECEIVABLE $100
EXAMPLE OF GROSS METHOD PAYMENT WITHIN PERIOD ACCOUNTS RECEIVABLE $100 SALES $100 CASH $97 DISOUNT 3 ACCOUNTS RECEIVABLE $100
NET METHOD ASSUMES DISCOUNT WILL BE TAKEN
DISCOUNT METHOD PAYMENT WITHIN PERIOD ACCOUNTS RECEIVALBE $97 SALES $97 CASH $97 ACCOUNTS RECEIVABLE $97
NET METHOD PAYMENT PAST PERIOD ACCOUNTS RECEIVABLE $97 SALES $97 CASH $100 DISCOUNTS NOT TAKEN $3 ACCOUNTS RECEIVABLE $97
PRESENTATION ON BALANCE SHEET NET ACCOUNTS RECEIVABLE = ACCOUNTS RECEIVABLE MINUS ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS THAT PORTION OF ACCOUNTS RECEIVABLE NOT EXPECTED TO BE COLLECTED.
JOURNAL ENTRY FOR ALLOWANCE FOR DOUBTFUL ACCOUNTS BAD DEBT EXPENSE xxx ALL FOR D/A XXX USE EITHER THE PER CENT METHOD OR AGING METHOD TO CACULATE THE BAD DEBT EXPENSE
PER CENT OF SALES METHOD SALES WERE $100,000 AND 3% IS NOT EXPECTED TO BE COLLECTED BAD DEBT EXPENSE $3000 ALL FOR D/A $3000
AGING METHOD ALL FOR D/A HAS A CREDIT BALANCE OF $4000 BUT $6000 IS NOT EXPECTED TO BE COLLECTED BAD DEBT EXPENSE $2000 ALL FOR D/A $2000
WHEN A CUSTOMER TAKES BANKRUPTCY AND WILL NO PAY ALL FOR D/A XXX ACCOUNTS RECEIVABLE XXX
ACCOUNTS RECEIVABLE ARE DISPOSED OF BY: PAYMENT BANKRUPTCY DISCOUNTS SELLING OF ACCOUNTS RECEIVABLE (NOT COVERED IN THIS PRESENTATION)
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