REPORTING AND ANALYZING RECEIVABLES Accounting, Fourth Edition 8 Identify the di

REPORTING AND ANALYZING RECEIVABLES Accounting, Fourth Edition 8 Identify the di www.phwiki.com

REPORTING AND ANALYZING RECEIVABLES Accounting, Fourth Edition 8 Identify the di

Sandler, Don, Host has reference to this Academic Journal, PHwiki organized this Journal REPORTING AND ANALYZING RECEIVABLES Accounting, Fourth Edition 8 Identify the different types of receivables. Explain how accounts receivable are recognized in the accounts. Describe the methods used to account as long as bad debts. Compute the interest on notes receivable. Describe the entries to record the disposition of notes receivable. Explain the statement presentation of receivables. Describe the principles of sound accounts receivable management. Identify ratios to analyze a company’s receivables. Describe methods to accelerate the receipt of cash from receivables. Study Objectives

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Types of Receivables Accounts Receivable Notes Receivable Statement Presentation of Receivables Managing Receivables Reporting in addition to Analyzing Receivables Accounts receivable Notes receivable Other receivables Recognizing accounts receivable Valuing accounts receivable Determining maturity date Computing interest Recognizing notes receivable Valuing notes receivable Disposing of notes receivable Balance sheet in addition to notes Income statement Extending credit Establishing a payment period Monitoring collections Evaluating liquidity of receivables Accelerating cash receipts Amounts due from individuals in addition to other companies that are expected to be collected in cash. Amounts owed by customers that result from the sale of goods in addition to services. Accounts Receivable Types of Receivables SO 1 Identify the different types of receivables. Claims as long as which as long as mal instruments of credit are issued as proof of debt. “Nontrade” (interest, loans to officers, advances to employees, in addition to income taxes refundable). Notes Receivable Other Receivables Amounts due from individuals in addition to other companies that are expected to be collected in cash. Types of Receivables SO 1 Identify the different types of receivables. Illustration 8-1

Two accounting issues: Recognizing accounts receivable. Valuing accounts receivable. Accounts Receivable SO 2 Explain how accounts receivable are recognized in the accounts. Service organization – records a receivable when it provides service on account. Merch in addition to iser – records accounts receivable at the point of sale of merch in addition to ise on account. Recognizing Accounts Receivable Illustration: Assume that Jordache Co. on July 1, 2012, sells merch in addition to ise on account to Polo Company as long as $1,000 terms 2/10, n/30. Prepare the journal entry to record this transaction on the books of Jordache Co. Accounts receivable 1,000 Jul. 1 Sales revenue 1,000 Accounts Receivable SO 2 Explain how accounts receivable are recognized in the accounts. Illustration: On July 5, Polo returns merch in addition to ise worth $100 to Jordache Co. Sales returns in addition to allowances 100 Jul. 5 Accounts receivable 100 Illustration: On July 11, Jordache receives payment from Polo Company as long as the balance due. Cash 882 Jul. 11 Sales discounts ($900 x .02) 18 Accounts receivable 900 Accounts Receivable SO 2 Explain how accounts receivable are recognized in the accounts.

Valuing Accounts Receivables Current asset. Valuation (net realizable value). Uncollectible Accounts Receivable Sales on account raise the possibility of accounts not being collected. Seller records losses that result from extending credit as Bad Debts Expense. Accounts Receivable SO 3 Describe the methods used to account as long as bad debts. Allowance Method Losses are estimated: Better matching. Receivable stated at net realizable value. Required by GAAP. Methods of Accounting as long as Uncollectible Accounts Direct Write-Off Theoretically undesirable: No matching. Receivable not stated at net realizable value. Not acceptable as long as financial reporting. Valuing Accounts Receivable SO 3 Describe the methods used to account as long as bad debts.

Accounting as long as A/R in addition to Bad Debts How are these accounts presented on the Balance Sheet Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 500 25 End. Assets Current Assets: Cash $ 346 Accounts receivable 500 Less allowance as long as doubtful accounts 25 475 Inventory 812 Prepaids – 40 Total current assets 1,673 Fixed Assets: Office equipment 5,679 Furniture & fixtures 6,600 Less: Accumulated depreciation (3,735) Total fixed assets 8,544 Total Assets $10,217 Assets Current Assets: Cash $ 346 Accounts receivable, net of $25 allowance as long as doubtful accounts 475 Inventory 812 Prepaids – 40 Total current assets 1,673 Fixed Assets: Office equipment 5,679 Furniture & fixtures 6,600 Less: Accumulated depreciation (3,735) Total fixed assets 8,544 Total Assets $10,217

Journal entry as long as credit sale of $100 Accounts receivable 100 Sales 100 Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 500 25 End. Accounting as long as A/R in addition to Bad Debts Journal entry as long as credit sale of $100 Accounts receivable 100 Sales 100 Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 600 25 End. Sale 100 Accounting as long as A/R in addition to Bad Debts Collected of $333 on account Cash 333 Accounts receivable 333 Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 600 25 End. Sale 100 Accounting as long as A/R in addition to Bad Debts

Collected of $333 on account Cash 333 Accounts receivable 333 Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 267 25 End. Sale 100 333 Coll. Accounting as long as A/R in addition to Bad Debts Adjustment of $15 as long as estimated Bad-Debts Bad debt expense 15 Allowance as long as Doubtful Accounts 15 Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 267 25 End. Sale 100 333 Coll. Accounting as long as A/R in addition to Bad Debts Adjustment of $15 as long as estimated Bad-Debts Bad debt expense 15 Allowance as long as Doubtful Accounts 15 Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 267 40 End. Sale 100 333 Coll. 15 Est. Accounting as long as A/R in addition to Bad Debts

Write-off of uncollectible accounts as long as $10 Allowance as long as Doubtful accounts 10 Accounts receivable 10 Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 267 40 End. Sale 100 333 Coll. 15 Est. Accounting as long as A/R in addition to Bad Debts Write-off of uncollectible accounts as long as $10 Allowance as long as Doubtful accounts 10 Accounts receivable 10 Accounts Receivable Allowance as long as Doubtful Accounts Beg. 500 25 Beg. End. 257 30 End. Sale 100 333 Coll. 15 Est. W/O 10 10 W/O Accounting as long as A/R in addition to Bad Debts Assets Current Assets: Cash $ 346 Accounts receivable, net of $30 allowance as long as doubtful accounts 227 Inventory 812 Prepaids – 40 Total current assets 1,425 Fixed Assets: Office equipment 5,679 Furniture & fixtures 6,600 Less: Accumulated depreciation (3,735) Total fixed assets 8,544 Total Assets $ 9,969

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Illustration: Assume, as long as example, that Warden Co. writes off M. E. Doran’s $200 balance as uncollectible on December 12. Warden’s entry is: Bad debts expense 200 Accounts receivable 200 Valuing Accounts Receivable Direct Write-off Method as long as Uncollectible Accounts SO 3 Describe the methods used to account as long as bad debts. Valuing Accounts Receivable Allowance Method as long as Uncollectible Accounts Companies estimate uncollectible accounts receivable. Debit Bad Debts Expense in addition to credit Allowance as long as Doubtful Accounts (a contra-asset account). Companies debit Allowance as long as Doubtful Accounts in addition to credit Accounts Receivable at the time the specific account is written off as uncollectible. SO 3 Describe the methods used to account as long as bad debts. Illustration: Hampson Furniture has credit sales of $1,200,000 in 2012, of which $200,000 remains uncollected at December 31. The credit manager estimates that $12,000 of these sales will prove uncollectible. Valuing Accounts Receivable Bad debts expense 12,000 Dec. 31 Allowance as long as doubtful accounts 12,000 SO 3 Describe the methods used to account as long as bad debts.

Valuing Accounts Receivable Illustration 8-3 Presentation of allowance as long as doubtful accounts SO 3 Describe the methods used to account as long as bad debts. Illustration: The vice-president of finance of Hampson Furniture on March 1, 2013, authorizes a write-off of the $500 balance owed by R. A. Ware. The entry to record the write-off is: Valuing Accounts Receivable Allowance as long as doubtful accounts 500 Mar. 1 Accounts receivable 500 Recording Write-Off of an Uncollectible Account Illustration 8-4 SO 3 Describe the methods used to account as long as bad debts. 1 July 1 Illustration: On July 1, R. A. Ware pays the $500 amount that Hampson Furniture had written off on March 1. Hampson makes these entries: Valuing Accounts Receivable Accounts receivable 500 Allowance as long as doubtful accounts 500 Recovery of an Uncollectible Account Cash 500 Accounts receivable 500 SO 3 Describe the methods used to account as long as bad debts.

In recording the derecognition of a receivable, as long as example, as the result of a factoring transaction: IFRS focuses on loss of control. GAAP focuses on loss of control in addition to risks in addition to rewards. IFRS in addition to GAAP allow partial derecognition. IFRS allows partial derecognition “Copyright © 2011 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request as long as further in as long as mation should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies as long as his/her own use only in addition to not as long as distribution or resale. The Publisher assumes no responsibility as long as errors, omissions, or damages, caused by the use of these programs or from the use of the in as long as mation contained herein.” Copyright

Sandler, Don Host

Sandler, Don is from United States and they belong to Culinary Confessions – KAZG-AM and they are from  Phoenix, United States got related to this Particular Journal. and Sandler, Don deal with the subjects like Cooking; Food; Restaurants/Dining

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