3100000

accounts and notes receivable are initially measured using

the fair value on the transaction date

which of the following are classified as receivables

-interest due from loans to customers -loans by a company to other entities

accounts and notes receivable are normally classified as ____ financial assets unless the company intends to sell them in the near future

Amortized cost

Adrian Corp sells goods on account for $100,000 on May 1. On May 15, the customer returns 40,000 of merchandise. the customer had not yet paid for any of the goods what will be recorded on May 15th

DR. sales returns and allowances 40,000 CR. AR 40,000

two method used for recording cash discounts are the

Net method Gross Method

a sales allowance refers to

a price reduction given to a customer

A financial asset classified as amortized cost is subsequently measured for reporting purposes at

cost or amortized cost

parades uses the gross method to record sales on account. Paredes sells good on account for 1,000 with terms 2/10, n/30 the journal entry is

credit sales 1000

PEL inc has accounts receivable of 25,500 at year end PEL offers a 2% discount to customers if they pay with 15 days of the invoice date. Management estimates that 75% of the customers will pay within the discount period. Assuming the allowance account has a zero balance, the journal entry required to adjust accounts receivable to net realizable value will include which of the following?

debit sales discounts 383.50 credit allowance for sales discounts

A company believes its sales return will be material. What is the journal entry required?

debit sales return and allowances; credit allowance for sales returns and allowances

bud zinc. has an accounts receivable balance on the SFP in the amount of 5,000. Budz is expecting payment within 30 days. The AR will be classified an an amortized cost financial asset because

management intends to hold the receivable to collect the Cash flow

the amount tha is actually expected to be collected in accounts receivable is referred to as

net realizeable value

which of the following explain the year end adjustment for estimated sales return and allowances

reduces accounts receivable to net realizable value

the amount representing a reduction in the amount to be paid by a credit customer if the customers pay within a specified period of time is also referred to as a _______

sales discount

when merchandise is returned for a refund or for credit to be applied to other purchases the situation is called

sales return

accounts receivable are initially recored at the exchange price agreed upon by the buyer and seller and subsequently reduced by which of the following

valuation allowances