MGAB01H3 Lecture Notes - Lecture 11: Internal Control, Bank Reconciliation, Bank Statement

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Published on 14 Nov 2018
School
Course
Professor
MGAB01 Week11
Chapter 6 review and internal control
Review
The time we should record debt expense: the same period of revenue
Two methods: indirect: aging of account receivable ( the number we figure out via
this method is ending balance of Allowance for bad debt)
Direct way: percentage of credit sales
How to calculate bad debt expense: ending balance – beginning balance
Exercise
-Problem2 on professor’s chapter 6 ppt
Journal entry
AR
100,000
revenue
100,000
cash
92,000
AR
92,000
Allowance for bad
debt
9,000
AR
9,000
T-account
Allowance
Begin balance
Write off
Bad debt expense
Ending balance
AR
Begin balance
Sales on account
Cash collection
Write off
Ending balance
Allowance for bad debt
Beginning balance: 2000
1000
Ending balance:3000
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