09 - Presentation Deck - ACC 211: PRINCIPLES OF ACCOUNTING...

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ACC 211: PRINCIPLES OF ACCOUNTING CHAPTER 9: Accounting for Accounts Receivable PRESENTATION DECK Prepared by: Jill Mitchell, Assistant Professor, NOVA Reference: Weygandt, Jerry, Kieso, and Kimmel. Accounting Principles Unless noted, illustrations are from the referenced text.
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Chapter 9-2 1.1 Identify the different types of receivables Chapter 9: Accounting for Accounts Receivable Course Competencies 2. Accounts Receivable 1. Types of Receivables 3. Notes Receivable 2.1 Be able to distinguish between the methods and bases companies use to value accounts receivable (to include bad debt expense, write off of uncollectible accounts) 2.2 Be able to determine net (cash) realizable value as reported on the balance sheet. ** 3.1 Compute the maturity date of and interest on notes receivable 3.2 Be able to prepare the journal entries for issuance of note, adjusting entries for interest, and honor of note
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Chapter 9-3 Types of Receivables Receivables : amounts due from individuals and other companies; claims that are expected to be collected in cash. 1. Accounts Receivable – amounts owned by customers on account as result of the sale of goods and services. Companies typically expect to collect within 30 to 60 days. 2. Notes Receivable – claims for which formal instruments of credit are issued as proof of the debt. Typically extends for time periods of 60-90 days or longer and requires the debtor to pay interest * Notes and accounts receivables that result from sales transactions are often called trade receivables .* 3 . Other Receivables – include nontrade receivables (i.e. interest receivable). Generally do NOT result from the operations of the business. 1.1 Identify the different types of receivables.
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Chapter 9-4 Three accounting issues: 1. Recognizing accounts receivable. 2. Valuing accounts receivable. 3. Disposing of accounts receivable. The following exercise was illustrated in Chapter 5 and you did this problem for homework. For simplicity, inventory and cost of goods sold have been omitted. Recognizing Accounts Receivable Accounts Receivable 1.1 Identify the different types of receivables.
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Chapter 9-5 E5-5 Prepare the journal entries for Wheeler Company . 1. On December 3, Wheeler Company sold $500,000 of merchandise to Hashmi Co., terms 2/10, n/30, FOB shipping point. Recognizing Accounts Receivable Dec. 3 Dr. Accounts receivable 500,000 Cr. Sales 500,000 2. On December 8, Hashmi Co. was granted an allowance of $27,000 for merchandise purchased on December 3. Dec. 8 Dr. Sales Returns and Allowances 27,000 Cr. Accounts receivable 27,000 3. On December 13, Wheeler Company received the balance due from Hashmi Co. Dec. 13
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09 - Presentation Deck - ACC 211: PRINCIPLES OF ACCOUNTING...

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