ACC 311 Study Guide - Midterm Guide: Finance Charge, Income Statement, Matching Principle

106 views6 pages

Document Summary

Allowance for bad debts: direct write-off method. Specific account is determined to be uncollectible (not allowed under gaap) Fails to match the bad debt expense to period in which revenue is recorded. Company makes credit sale for nov 1, yr 1. At end of each accounting period, estimate of expected losses is made from uncollectible accounts (debit bad debt expense, credit allowance for doubtful accounts) Matches bad debt expense to period revenue is recorded. Ensures companies state receivables on bs at their net realizable value. Nrv is the net amount the company expects to receive in cash. Methods for estimating bad debts under allowance method. Bad debt expense is estimated as percent of credit sales during year. Company estimates that 1% of credit sales are uncollectible, credit sales for the year is ,000: income statement approach, balance sheet approach. End balance of allowance for da is percentage of a/r at year end.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers

Related Documents

Related Questions