1st draft revisions.docx - Accounting Policies and Procedures The accounting department uses the accrual method of accounting Since they have a lot of

1st draft revisions.docx - Accounting Policies and...

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Accounting Policies and Procedures The accounting department uses the accrual method of accounting. Since they have a lot of operating segments, each segment has different ways of accounting. For grocery items like Wings products and Dental B, and paper products, they are mostly sold in account to wholesalers, n/30 in general, which means that the payable must be settled within 30 days. Specifically, for Wings, the credit term is 2/10 n/30 for Wings, meaning that if the debtor pays within ten days, he is entitled to 2% cash discount on the amount due, and 1/7, n/30 for Dental B, meaning that if the debtor pays within seven days, he is entitled to 1% discount on the amount due. Since they are sold in credit, accounts receivable is often reported at net realizable value (Accounts Receivable less Allowance for Doubtful Accounts). The Allowance for Doubtful Accounts is determined by aging
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