BU127 Chapter 7: BU-127 Chapter 7

• School: WLU
• Department: Business
• Course: BU127
• Professor: James Moore

Document Summary

Sales to consumers: paid with cash or credit card. If customers pay with credit cards there will be a fee that the business must pay to the credit card company. Sales discounts to businesses: cash discounts offered to encourage prompt payment of a trade account receivable. Sales returns and allowances: a reduction of gross sales revenues for returns of or allowances for unsatisfactory goods. Reporting net sales (cid:1857)(cid:1872) (cid:1845)(cid:1853)(cid:1857)(cid:1871)=(cid:1845)(cid:1853)(cid:1857)(cid:1871) (cid:1844)(cid:1857)(cid:1874)(cid:1857)(cid:1866)(cid:1873)(cid:1857) (cid:1829)(cid:1870)(cid:1857)(cid:1856)(cid:1872)(cid:1829)(cid:1853)(cid:1870)(cid:1856) (cid:1830)(cid:1871)(cid:1855)(cid:1867)(cid:1873)(cid:1866)(cid:1872) (cid:1845)(cid:1853)(cid:1857)(cid:1871) (cid:1830)(cid:1871)(cid:1855)(cid:1867)(cid:1873)(cid:1866)(cid:1872) (cid:1845)(cid:1853)(cid:1857)(cid:1871) (cid:1844)(cid:1857)(cid:1872)(cid:1873)(cid:1870)(cid:1866)/(cid:1867)(cid:1875)(cid:1853)(cid:1866)(cid:1855)(cid:1857) Trade receivable: open accounts owed to the business by trade customers. Note receivable: written promise that requires another party to pay the business under specific conditions (amount, time, interest) Allowance method: bases bad debt expense on an estimate of uncollectible accounts. Bad debt expense (doubtful accounts expense: the expense associated with estimated uncollectible trade receivables. Allowance for doubtful accounts (allowance for doubtful receivables, allowance for doubtful. Debts: a contra-asset account containing the estimated uncollectible trade receivables.