Lecture 6 (AFDA Supplemental)

Lecture 6 (AFDA Supplemental) - AFDA Supplemental 9/13/11...

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Click to edit Master subtitle style 9/13/11 AFDA – Supplemental MGCR 211
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9/13/11 Allowance Method To ensure proper matching, an expense is taken at the time the AR is recorded and a contra account called Allowance for Doubtful Accounts is created The AFDA account is a contra account (credit position) The AFDA represents the amount of the future losses that you will incur when
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9/13/11 AFDA – Sales Allowance Method Sales allowance method looks at sales made on credit and then records a percentage of those sales as uncollectible. Will look at history and what is the percentage uncollectible.
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9/13/11 AFDA – Sales Allowance Method Houston Corporation made sales on account for $7,000,000 this month. On average, Houston Corporation is unable to collect 4% of their AR. The current AFDA balance is $600,000 What entries should Houston make?
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9/13/11 AFDA AR Aging Method The AR Aging method looks at the AR Aging ledger to make the estimate of the bad debt Companies usually keep a detailed
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This note was uploaded on 09/12/2011 for the course MGCR 211 taught by Professor La rocca during the Fall '08 term at McGill.

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Lecture 6 (AFDA Supplemental) - AFDA Supplemental 9/13/11...

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