Chapter 9_Lecture_Summer_2010 - Chapter 9 Study Objectives...

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Financial Accounting: The Impact on Decision Makers
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Chapter 3 / Exercise 01
Financial Accounting: The Impact on Decision Makers
Norton/Porter
Expert Verified
1.Identify the different types of receivables.2.Explain how companies recognize accounts receivable.3.Distinguish between the methods and bases companies use to value accounts receivable.4.Describe the entries to record the disposition of accounts receivable.5.Compute the maturity date of and interest on notes receivable.6.Explain how companies recognize notes receivable.7.Describe how companies value notes receivable.8.Describe the entries to record the disposition of notes receivable.9.Explain the statement presentation and analysis of receivables.Chapter 9 Study ObjectivesChapter 9 Study Objectives
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Financial Accounting: The Impact on Decision Makers
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Chapter 3 / Exercise 01
Financial Accounting: The Impact on Decision Makers
Norton/Porter
Expert Verified
Amounts due from individuals and other companies  that are expected to be collected in cash.Amounts owed by customers that result from the sale of goods and services.Accounts Accounts ReceivableReceivableTypes of ReceivablesTypes of ReceivablesClaims for which formal instruments of credit are issuedas proof of debt.“Nontrade” (interest, loans to officers, advances to employees, and income taxes refundable).Notes Notes ReceivableReceivableOther Other ReceivablesReceivables
Three accounting issues:1.Recognizing accounts receivable.2.Valuing accounts receivable.3.Disposing of accounts receivable.Accounts ReceivableAccounts ReceivableThe following exercise was illustrated in Chapter 5.  For simplicity, inventory and cost of goods sold have been omitted.Recognizing Accounts Receivable
Illustration:Illustration: Presented are transactions related to Wheeler Company.1.On December 3,Wheeler Company sold $500,000 of merchandise to Hashmi Co., terms 2/10, n/30, FOB shipping point. 2.On December 8, Hashmi Co. was granted an allowance of $27,000 for merchandise purchased on December 3.3.On December 13,Wheeler Company received the balance due from Hashmi Co. Instructions:  Prepare the journal entries to record these transactions on the books of Wheeler Company using a perpetual inventory system.Recognizing Accounts ReceivableRecognizing Accounts Receivable
Illustration:Illustration:  Prepare the journal entries for Wheeler Co.1.On December 3, Wheeler Company sold $500,000 of merchandise to Hashmi Co., terms 2/10, n/30, FOB shipping point. Accounts receivable500,000Dec. 3Sales500,000Recognizing Accounts ReceivableRecognizing Accounts Receivable
Illustration:Illustration:  Prepare the journal entries for Wheeler Co.2. On December 8, Hashmi Co. was granted an    allowance of $27,000 for merchandise purchased     on December 3.Sales returns and allowances  27,000Dec. 8Accounts receivable27,000Recognizing Accounts ReceivableRecognizing Accounts Receivable
Illustration:Illustration:  Prepare the journal entries for Wheeler Co.3. On December 13, Wheeler Company received the balance due from Hashmi Co.

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