We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published bySonia Treen
Modified over 2 years ago
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)
BAD DEBTS Chapter 8 p Bad Debts = a term used to describe amounts that cannot be collected The reporting of bad debts is governed by the matching.
Valuing Accounts Receivable Some receivables will become uncollectible – Not reported as assets if no future benefit – Net realizable value: the collectible.
BONDS PAYABLE ARE AN OBLIGATION TO PAY A FIXED AMOUNT OF INTEREST AND PRINCIPLE FOR A FIXED PERIOD OF TIME.
Reporting and Interpreting Sales Revenue, Receivables, and Cash Chapter 6 McGraw-Hill/Irwin © 2009 The McGraw-Hill Companies, Inc.
Unit 8 Estimating Bad Debts.
Cash Payment Journal. Words to Know Cash Payments Journal List Price Trade Discount Cash Discount Purchases Discount Contra Account.
INVENTORY TANGIBLE ITEMS HELD FOR RESALE IN THE ORDINARY COURSE OF BUSINESS PRESENTED ON THE BALANCE SHEET UNDER CURRENT ASSETS AT THE LOWER OF COST OF.
Estimating Bad Debts Chapter 9 – Part 2 COMPARISON OF BASES OF ESTIMATING UNCOLLECTIBLES Percentage of Sales Percentage of Receivables Net Realizable.
BSAD 221 Introductory Financial Accounting Donna Gunn, CA.
PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA CHAPTER.
Chapter 6 Receivables and Inventory. Classifying Receivables Accounts Receivable ─ Credit terms extended to customers Notes Receivable ─ More formal agreement.
ACCOUNTING FOR RECEIVABLES Unit 8. The term receivables refers to amounts due from individuals and other companies; they are claims expected to be collected.
1 © Copyright Doug Hillman 2000 Accounts Receivable and Bad Debts Expense.
Advanced Financial Accounting FIN-611 Mian Ahmad Farhan Lecture-3 Single Entry (Conversion Method)
Accounts Receivable Generally, two major issues: How to Record Sales Discounts.
1 LO5 Describe accounting for receivables and uncollectible amounts. LO6Explain how returns and discounts are accounted for. LO7Account for long-term receivables.
Chapter 6 Receivables and Inventory. Learning Objectives After studying this chapter, you should be able to… Describe the common classifications of.
Apple Corporation Sample Accounts Receivable Subsidiary Ledger
© 2017 SlidePlayer.com Inc. All rights reserved.