ACCT 3001 Chapter : Chapter 7 Notes
Document Summary
Deposits as a guarantee of performance or payment: advances to officers and employees, dividends and interest receivable. Others- income tax refund receivables, amounts due from creditors for returned goods, etc. Chapter 7 receivables: recognition of accounts receivable. Accounts receivable are recognized when a company satisfies its performance obligation by transferring goods or services to the customer. The transaction price is the amount of consideration that a company expects to receive from a customer in exchange for transferring goods or services. 4 items may affect the transaction price and a/r balance: trade discounts, reductions from the list price, not recognized in the accounting records, customers are billed net of discounts, sales returns and allowances (contra revenue, normal. Dr: provision for a return or allowance if customer is dissatisfied with product or services. On 9/20/16, bengal corp sold ,000 of goods to tiger. On 9/30, bengal granted a allowance for imperfect items. Balance sheet would record net sales of 4,500.
