Chapter 7-powerpoint-class

Chapter 7-powerpoint-class - CHAPTER 7 Reporting and...

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Reporting and Analyzing Receivables C H A P T E R 7
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RECEIVABLES Amounts Due from another party. Most common receivables are: 1. Accounts Receivable 2. Notes Receivable
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Accounts Receivable Amounts due from customers for credit sales. Credit sales require: Maintaining a separate account receivable for each customer. Accounting for bad debts (uncollectible accounts) that result from credit sales.
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CREDIT SALES 1.Direct Credit Sales to Customers 2.Credit Card Sales
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On Feb 13, UGA Company sells $500 of merchandise on credit to Jack, and $700 of merchandise on credit to Jill Sales on Credit to Customers
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On Feb 23, UGA Company collects $300 from Jack and $400 from Jill on account. Sales on Credit to Customers
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With bank credit cards, the seller deposits the credit card sales receipt in the bank just like it deposits a customer’s check. The bank increases the balance in the company’s checking account. The company usually pays a fee of 1% to 5% for the service. Credit Card Sales
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Credit Card Sales Accounting for Credit Card Sales depends upon when Cash will be received from the Sale…. . 1. Immediate on deposit of Credit Card Receipt. OR 2. Delayed until Credit Card Company makes payment.
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On Feb 13, UGA Company has a bank credit card sale of $500 to a customer. The bank charges a processing fee of 2%. The cash is received immediately. Credit Card Sales Immediate Payment…. .
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On Feb 13, UGA Company has a bank credit card sale of $500 to a customer. The bank charges a processing fee of 2%. UGA remits the credit card sale to the credit card company and waits for the payment that is received on Feb 25. Credit Card Sales Wait for Payment….
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Valuing Accounts Receivable Some customers may not pay their account. Uncollectible amounts are referred to as…………. .When an account receivable becomes uncollectible, a firm incurs a bad debt loss.
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Accounting for Uncollectible Accounts 2 Methods: Direct Write off Allowance Method
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Direct Write-Off Method Write off an account receivable as uncollectible when it is deemed to be uncollectible.
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On Jan 1, we determine that we cannot collect $400 from Mr. Bad Guy, a credit customer. Direct Write-Off Method To write off a customer’s account
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Direct Write-Off Method
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Chapter 7-powerpoint-class - CHAPTER 7 Reporting and...

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