Receivables-S

Receivables-S - T HE A LLOWANCE M ETHOD What will appear in...

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· 1 CORPORATE FINANCIAL REPORTING Reporting of Receivables
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R ECEIVABLES Hard core stuff – revenue adjustments bad debts sales returns 2 Accounts Receivable
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R ECEIVABLES - B AD D EBTS Primarily two ways to account for bad debts: the direct write-off method the “allowance” method 3 Accounts Receivable
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B AD D EBTS, T HE D IRECT M ETHOD What will appear in F/S? Year 1: Sales on account: $100,000 Collect from customers: $80,000 Year 2: Sales on account: 150,000 Collect from customers: $110,000 Customer owing us $5,000 from Year 1 calls and says “Too bad - bye, bye.” 4 Accounts Receivable
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B AD D EBTS,
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Unformatted text preview: T HE A LLOWANCE M ETHOD - What will appear in F/S? Year 1: Sales on account: $100,000 Collect from customers: $80,000 Year 2: Sales on account: 150,000 Collect from customers: $110,000 Customer owing us $5,000 from Year 1 calls and says “Too bad - bye, bye.” 5 Accounts Receivable R ECEIVABLES - S ALES R ETURNS What will appear in F/S? Our company makes sales on account of $100,000 in December 2007. Our past experience is that .1% of sales are returned the next month. 6 Accounts Receivable Q UESTIONS ? 7 Accounts Receivable...
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Receivables-S - T HE A LLOWANCE M ETHOD What will appear in...

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