Financial Accounting Notes

Financial Accounting Notes - 1 ACCT Exam 2 Notes: Two...

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ACCT Exam 2 Notes: Two methods for uncollectible accounts Direct Write-off o After its clearly determined that specific accounts will not be collectible, they will count them as uncollectible o Problem: doesn’t match Allowance method o Matches expense (bad A/R) with revenue Method: A/R 100 Allowance for Doubtful Accounts 4 . Net Balance 96 The main account that you have to understand is the Allowance for Doubtful Accounts T Accounts Allowance for Doubtful Accounts (Contra Account for A/R) 3) 2 1) 20 2) 4 4) 2 Bad Debt Expense 2) 4 A/R 1) 100 4) 2 3) 2 Journal Entries: 1) Initial opening balance 2) Bad Debt Expense 4 Allowance for D/Ac. 4 3) Allowance for Doubtful Ac. 2 A/R 2 4) Recovery A/R 2 Allowance D. 2 Cash 2 A/R 2 1
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Inventory: How to measure total inventories as they get sold to customers—cost of goods sold Cost assumptions that we use o FIFO o LIFO o Weighted Average Need to be able to calculate ending inventory and COGs under the correct method Method: Date
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Financial Accounting Notes - 1 ACCT Exam 2 Notes: Two...

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