BIOC 212 Chapter Notes - Chapter 8: Matching Principle, 2011 Nfl Season, Debits And Credits
17 Aug 2018
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Account receivable: receivable: claims that are expected to be collected in cash. Trade receivable (occurred during operation: account receivable: amounts owed by the customer from normal business transactions of selling goods or services on credit, note receivable: claims for which formal credit arrangement between a creditor and a debtor. Other receivables (non-trade receivables): interest receivable, loans to company officers, etc. Ar valuation: there"s often uncertainty with regards to collectability of the accounts receivables, sometimes customers are not able to pay you, when customers are not expected to pay you, this is considered an expense for the company. This expense is called bad debt expense an estimated amount. *increase in bad debt expense lead to reduction of net income. *ending balance will be on the right end side: when debiting the bad debt expense, afda (allowance for doubtful account) is credited. Afda is a contra-ar account (credit position)
