Textbook Notes (369,137)
Canada (162,407)
Accounting (533)
ACC 100 (214)
Chapter 7

Chapters 7, 8, 9

8 Pages

Course Code
ACC 100
Walter Krystia

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Chapter 7 Liquid Assets and Internal Control Subsidiary Ledger: The detail for a number of individual items that collectively make up a single general ledger account. Control Account: The general ledger account that is supposed by a subsidiary account. An account receivable signifies that an external party owes the entity money! A trade account receivable represents the amount owed to the entity by a customer in respect of revenue from the sale of goods provision of services. Credit Sales Disadvantages: Slows inflow of cash Risk of uncollectible accounts Example: Say in January of the following year, the company found out that one of their customers declared bankruptcy. The company has an AR from the customer of $40,000. What should we do? - We have to write-off the balance because it has no future economic benefit. Assets = Liabilities + Shareholders Equity Accounts Receivable Bad Debt Expense - 40,000 - 40,000 Potential uncollectible AR balances some AR will be uncollectible dont know which specific customers accounts will not be collected management uses their knowledge (based on past experience, current economic conditions and industry averages) to ESTIMATE the proportion that will go bad in the www.notesolution.com
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