chapter 9 accounting
Can you calculate Accounts Receivable turnover?
net credit sales/average net accounts receivable
Do you know how to record the journal entry to recognize and dispose of a note receivable? 9-15 through 9-17
notes receivable cash cash notes receivable interest revenue
What does cash realizable value mean in relation to presenting accounts receivable and notes receivable on the Balance Sheet? 9-6, see illustration 9.3
represents the expected cash realizable value of the accounts receivable at the statement date
notes receivable
a writtten promise to pay amounts due, usually received within 60 to 90 days, or longer
Can you record the two journal entries involved in recovering an uncollectible account? 9-7 & 9-8
accounts receivable allowance for doubtful accounts cash accounts receivable
Can you record the journal entries to record accounts receivable? For example, what would the journal entries be for the following transactions?"Jordache Co. on July 1, 2020, sells merchandise on account to Polo Company for $1,000, terms 2/10, n/30. On July 5, Polo returns merchandise with a sales price of $100 to Jordache Co. On July 11, Jordache receives payment from Polo Company for the balance due. " This concept is a review of CH5 LO3
accounts receivable 1000 sales revenue 1000 sales return and allowances 100 accounts receivable 100 cash 882 sales discounts 18 accounts receivable 900
Can you record the journal entry to write off uncollectible accounts? 9-7
allowance for doubtful accounts accounts receivable
Accounts Receivable
amounts due for buying goods or services, usually within 30 to the 60 days
interest receivable
amounts due for interest on amounts borrows, may be received with notes receivable payments
What does it mean when a note is "dishonored" and what is the journal entry to record that event? 9-17
it means a note that is not paid in full at maturity. accounts receivable notes receivable interest receivable
Are you able to calculate the estimate of uncollectibles and record the journal entry? Do you understand why we record bad debt expense at the end of an accounting period before we know of the specific customers that will be uncollectible in the future?
bad debt expense allowance for doubtful accounts Companies use a contra account instead of a direct credit to Accounts Receivable because they do not know which specific customers will not pay. The credit balance in the allowance account will absorb the specific write-offs when they occur.
Can you calculate the amount of bad debt expense at the end of an accounting period and record the journal entry for it? 9-8 through 9-10
bad debt expense allowance for doubtful accts
How does a company present Receivables and Allowance for Doubtful Accounts on the Balance Sheet? 9-19
current assets
Can you calculate the average collection period?
days in the year/ accounts receivable turnover
Are you prepared to record the journal entry to accrue interest? Can you calculate interest using the interest formula? Can you calculate the maturity value of a note? 9-15 & 9-17
interest receivable interest revenue
What is a promissory note and what are all the elements in the agreement? 9-13 & 9-14
is a written promise to pay a specified amount of money on demand or at a definite time. Promissory notes may be used in the following cases: When individuals and companies lend or borrow money. When the amount of the transaction and the credit period exceed normal limits. In settlement of accounts receivable. In a promissory note, the party making the promise to pay is called the maker. The party to whom payment is to be made is called the payee. The note may specifically identify the payee by name or may designate the payee simply as the bearer of the note.
How does a company value it's Accounts Receivable on the Balance Sheet?
they record it as an asset
