ACCT-110 Lecture Notes - Lecture 6: Accrued Interest

ACCT-110 Lecture Notes - Lecture 6: Accrued Interest

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rosemuskrat747

7 Nov 2017

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Accounts receivable represents credit supplied to your customers. Accounts receivable is a large investment in working capital for most companies. If the companies did not provide credit they would receive cash from sales earlier. It delays receipt of cash from the customer. Credit card sales are sales made on credit provided by a bank. The company receives cash for the sale immediately. The company pays the bank a fee for this service. The bank absorbs the risk of bad debt expense. Bad debts: represent expense for customers who do not pay their bills. Bad debt is an expense and is recognized two ways: Sales revenue xx xx xx: direct write off, allowance method. The journal entry for the direct write off is: The journal entry for the allowance method is: xx. Allowance for doubtful accounts is a contra-asset account = reduction of receivables. Note receivable: represents a loan to another individual or company usually to book a sale .

6. The bad-debt method that uses the accounts receivable agingreport is _______________.

	the bad-debt expense method
	the percentage-of-sales method
	the direct write-off method
	the percentage-of-receivables method

7. When it is determined that too much money has been set asidefor uncollectible accounts, we will _______________.

	credit reserve for uncollectible accounts
	debit accounts receivable
	credit cash
	debit reserve for uncollectible accounts

8. A customer whose account was previously written offunexpectedly pays us. If we are using the allowance method we would_______________.

	debit accounts receivable and credit allowance for uncollectibleaccounts AND debit cash and credit accounts receivable
	debit cash and credit bad-debt expense
	debit reserve for uncollectible accounts and credit cash
	debit bad-debt expense and credit cash

9. When a retailer accepts a bank card (VISA or MasterCard),they will make what entry for the dayâs receipts?

	debit cash and debit âcredit card expenseâ; credit sales
	debit accounts receivable and credit sales
	debit cash and credit sales
	debit accounts receivable; credit sales, and credit âcredit cardexpenseâ

mauvemarten239

Please answer.

Credit Card Sales Historically, 60 percent of the customer bills at the Andrews' Supper Club have been paid with cash or check, and 40 percent have been paid using either the Great American Bank Card or the United Merchants Card. Andrews pays a 4% fee with both cards. Great American Bank deposits cash in Andrews' checking account when the credit card sales slips are deposited. United Merchants makes an electronic funds transfer three days after the sales slips are mailed. Prepare journal entries to record the following:

Round to the nearest dollar.

a.	Sales for September 10 were as follows:
	Cash and checks	$43,500
	Great American Bank Card (Deposited at the end of the day)	18,270
	United Merchants Card (Mailed at the end of the day)	16,530
		$78,300

b.	On September 13, Andrews received an electronic funds transfer from
	United Merchants for the September 10 sales.

General Journal
Date	Description	Debit	Credit
Sept.10	Cash	$Answer	$Answer
	AnswerCashAccounts Receivable - United MerchantsCredit Card Fee ExpenseSales Revenue	Answer	Answer
	Credit Card Fee Expense	Answer	Answer
	AnswerCashAccounts Receivable - United MerchantsCredit Card Fee ExpenseSales Revenue	Answer	Answer
	To record cash and credit card sales.

General Journal
Date	Description	Debit	Credit
Sept.13	AnswerCashAccounts Receivable - United MerchantsCredit Card Fee ExpenseSales Revenue	$Answer	$Answer
	AnswerCashAccounts Receivable - United MerchantsCredit Card Fee ExpenseSales Revenue	Answer	Answer
	To record receipt of check from United Merchants.

ochrehornet688

PLEASE FOLLOW THE INSTRUCTIONSâ

Assignment: Special Journals: Sales and Cash Receipts (12 Points)

Prepare a cash receipts journal based on the information given below and post it to the Accounts Receivable Subsidiary Ledger.

On Nov 17, Ms. Don & Co. received $1,450 from Gians Graze to apply on account. The source document for this transaction is Receipt 30.

Instructions:

1. Prepare a sales journal entry based on the information given above and post it to the Accounts Receivable General Ledger account and to the Accounts Receivable Subsidiary Ledger. (Use November 7 for this transaction date.) ***This is the same entry that you made for the previous assignment. However, use the transaction date given (Nov. 7).

2. Enter the above transaction (Nov 17) into the Cash Receipts Journal and post it to the Accounts Receivable General Ledger account and to the Accounts Receivable Subsidiary Ledger.

3. Prepare a Schedule of Accounts Receivable and check to see that the total agrees with the Accounts Receivable ledger account.

			Sales Journal
Date	Doc. No.	Customer's Account Name	Post Ref.	Sales Credit	Sales Tax Payable Credit	Accounts Receivable Debit

				Cash Receipt Journal
Date	Doc. No.	Account Name	Post Ref.	Sales Credit	Sales Tax Payable Credit	Account Receivable Credit	Sales Discount Credit	Cash in Bank Debit

	Ms. Don & Co. Schedule of Accounts Receivable November 30, 20xx
Account Name	Amount


Total Accounts Receivable		$

redmammoth172

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