MAA261 Lecture Notes - Lecture 4: Cash Register, Accounts Payable, Cheque
Document Summary
Define accounts receivable and discuss how accounting recognizes and values them. They are recognized usually at the time of sale and need to consider discounts and allowances. Not all amounts owing will be collected and we thus (cid:373)ust a(cid:272)(cid:272)ou(cid:374)t fo(cid:396) a(cid:374) esti(cid:373)ate of a(cid:373)ou(cid:374)t that (cid:449)ill (cid:271)e(cid:272)o(cid:373)e (cid:858)(cid:271)ad(cid:859) (cid:894)(cid:374)ot (cid:272)olle(cid:272)ted(cid:895). Subsidiary ledgers: when a large amount of detailed information is required separate subsidiary ledgers are used, the total balance of the related subsidiary ledgers is recorded in a control account. It is often used for a range of accounts including accounts receivable/payable and inventory: we will need to complete a subsidiary ledger in our assignments. Explain the nature of bad and doubtful debts and how to account for them. Identify the principals involved in the management and control of accounts receivable. Bad and doubtful debts: represents the risk of doing business on credit.
