Lec7_2008 - Receivables and Revenue Recognition I....

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Receivables and Revenue Recognition I. Allowances for Uncollectible Accounts - % of Sales-Method 1 - Aging-Method 2
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Allowances for Uncollectible Accounts Not all Sales on Account are Expected to be Collected Therefore: 1. Sales Revenue overstates expected collections, and 2. Accounts Receivable overstates expected collections. Adjust Sales and Receivables for Expected Uncollectibles % of Sales - use past experience to estimate % uncollectible. - make adjusting entry to reduce Sales Revenue and Accounts Receivable Bad Debt Expense $xx Allowance for Uncollectibles(XA) $xx
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Allowances for Uncollectible Accounts Cont’d. Adjust Sales and Receivables for Expected Uncollectibles Bad Debt Expense $xx Allowance for Uncollectibles(XA) $xx When it is Determined that a Specific Account is Uncollectible Allowance for Uncollectibles(XA) $xx Account Receivable $xx
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E6-8
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- periodically examine outstanding (delinquent) accounts and revise estimates, making any necessary adjustment:
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This note was uploaded on 09/18/2008 for the course ACCT 2050 taught by Professor Sanjay during the Spring '08 term at Minnesota.

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Lec7_2008 - Receivables and Revenue Recognition I....

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