AC 101 Fall 2007 Ch 7

AC 101 Fall 2007 Ch 7 - Valuing Receivables Chapter Seven...

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Valuing Receivables Chapter Seven Prepared by: Sarita Sheth Santa Monica College
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Chapter Seven Objectives 1. Understand why firms anticipate doubtful accounts from customers and recognize bad debt expense. 2. Describe the estimation methods used to determine the provision for doubtful accounts and the balance in the allowance for doubtful accounts. 3. Explain the relationship between revenue recognition, and the concept of net realizable value applied to receivables. 4. Discuss the conversion of receivables into cash through factoring and securitization and the disclosure requirements associated with this activity.
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Types of Receivables Accounts receivables or trade receivables usually from credit sales of goods and services. Financing receivables come from lending money to others. For example: Notes Receivables are written promises to pay a specific amount with interest at a future date.
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Accounts Receivable Terms Net realizable value refers to the amount the firm expects to collect of its receivables. Uncollectible accounts
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This note was uploaded on 09/30/2008 for the course AC 101 taught by Professor Ammons during the Spring '08 term at Quinnipiac.

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AC 101 Fall 2007 Ch 7 - Valuing Receivables Chapter Seven...

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