ACCT 203 Lecture Notes - Lecture 3: Promissory Note, Accounting Software, Accounts Receivable
22 May 2018
School
Department
Course
Professor
GMU ACCOUNTING 203
Lecture 3
Solution
Bad Debts Expense = 3% × $304,900 = $9,147
Aging method
The aging method takes place by sorting a company's accounts
receivable according to the dates of these unpaid invoices. The invoice
amounts that are not yet due are entered into the first of perhaps five
columns. The invoice amounts that are 1-30 days past due are entered
into the second column. Amounts that are 31-60 days past due are
entered into the third column, and so on. (Accounting software will
likely have a feature for generating an aging of accounts receivable.)
The aging will be reviewed in order to determine the approximate
amount of the receivables that may not be collected.
-When you see " % of Accounts recievable" use aging method.
Notes receivable
represents claims for which formal instruments of credit are issued as
evidence of debt, such as a promissory note. The credit instrument
normally requires the debtor to pay interest and extends for time
periods of 30 days or longer.
find more resources at oneclass.com
find more resources at oneclass.com
