ACCT 001A Lecture Notes - Lecture 10: Accounts Receivable, Promissory Note, Income Statement
25 Jun 2020
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Account receivable is a promise to pay from our customers, informal agreement, for credit sales. Notes receivale- promisory notes underlying promise to pay, usually intersest to pay. Credit sales require maintaining a separate account receivable for each customer, accounting for bad debts that result from credit sales. Allowing customers to use cards: customers credit is evaluated by the credit card issuer, sales increase by providing payment options, cash collections are quicker, risks of extending credit are transferred to the credit card issuer. On july 16, 2014 barton co. has a bank credit card sale of to a customer. The bank charges a processing fee of 2%. Debit cash 490 and debit credit card expense 10 and credit sales 500; Installment accounts receivable- exceeds longer than 30,60,90 days, almost note receivable, evidence by a promissory note, payment is required in periodic amounts over and extended time period. Some customers may not pay their account.
