ADM 1340 Study Guide - Final Guide: Promissory Note, Debits And Credits, Accounts Receivable

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apricothippopotamus623

12 Dec 2017

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ADM 1340 Full Course Notes

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A receivable is reduced when cash is collected, a sales discount is taken, or the merchandise is returned by the customer. Bank credit/debit card transactions are recorded as cash while nonbank (company) credit cards are recorded as accounts receivable. Subsidiary ledger is a group of accounts that share a common characteristic (i. e. accounts receivables) The single accounts receivable account in the general ledger is the control account. Losses from uncollectible accounts are debited to the bad debts expense account. Allowance for doubtful accounts is a contra asset account shown below accounts receivable and is an estimation of the uncollectible accounts. Actual accounts are written off when they are determined to be uncollectible. Recording the recovery of an uncollectible (2 separate entries): Notes receivable are a credit instrument that normally requires the payment of interest and extends for time periods greater than 30 days. They have a stronger legal claim to assets than accounts receivable; written promise (promissory note) to repay.

Related Questions

If the allowance method of accounting for uncollectible receivables method was used and an estimate was made at year end, Dec.31 ........what general ledger accounts are debited and credited in JANUARY when a particular customer's account is identified as uncollectible?

debit Allowance for Bad Debts; credit Accounts Receivable

debit Bad Debts Expense; credit Accounts Receivable

debit Bad Debts Expense; credit Allowance for Bad Debts

debit Bad Debts Expense; credit Allowance for Bad Debts: incorrect.

debit Accounts Receivable; credit Allowance for Bad Debts

bluemuskrat927

The ledger of Sairu Company at the end of the current year shows Accounts Receivable $195,000, Sales Revenue $1,800,000, and Sales Returns and Allowances $60,000.

Instructions:

(a) If Sairu uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sairu determines that Mashfi's $2,500 balance is uncollectible.

(b) If Allowance for Doubtful Accounts has a credit balance of $3,500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable.

(c) If Allowance for Doubtful Accounts has a debit balance of $590 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 7% of accounts receivable.

peachturtle861

Adham Sdn. Bhd. accounts for its uncollectible accounts usingthe allowance method. The company reported the following accountbalances at 31 December 2017.

	RM
Accounts receivable	250,000
Less: Allowance for doubtful accounts	12,500

During the year 2017, the company had the following transactionsrelated to receivables.

	RM
1.Credit sales	600,000
3.Collections of accounts receivable	680,000
4.Write-offs of accounts receivable	10,800
5.Recovery of bad debts previously written off	3,000

Required:

a) Journalise transactions 1 - 5 above.

b) Post the entries to the two accounts: Accounts receivable andAllowance for doubtful account.

c) Record the bad debt expense for 2017 (in T-account) undereach of the following independent assumptions:

i. The company estimates its bad debt expense based on 5% ofoutstanding account receivable balance.

ii. The company bad debt estimate is 1% of its credit sales.

d) What is the net realisable value of Accounts Receivable at 31December 2017 under assumption (i) above.

carminesalmon51

ADM 1340 Study Guide - Final Guide: Promissory Note, Debits And Credits, Accounts Receivable

ADM 1340 Full Course Notes

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