252S07Ch8Slides_Student

252S07Ch8Slides_Student - Tools for Business Decision...

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1 Financial Accounting: Tools for Business Decision Making, 4th Edition Kimmel, Weygandt, Kieso CHAPTER 8 REPORTING AND ANALYZING RECEIVABLES REPORTING AND ANALYZING RECEIVABLES Prepared by  Ellen L. Sweatt  Georgia Perimeter College and Barbara Muller Barbara Muller Arizona State University West Arizona State University West Edited for classroom use 3/07
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2 Amounts due from individuals and other companies-expected to be collected in cash Three major classes of receivables Accounts Receivable –amounts owed by customers on account, expected to be collected within 30 to 60 days Notes Receivable -claims of which formal instruments of credit are issued Other Receivables – non trade receivables, for example, interest receivable and advances to employees TYPES OF RECEIVABLES 11 1
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3 RECOGNIZING ACCOUNTS  RECEIVABLE When a business sells merchandise to a customer on credit,  Accounts Receivable  is debited (increased) and  Sales  is credited  (increased). 
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4 Date Account Titles Debit Credit General Journal RECOGNIZING ACCOUNTS  RECEIVABLE When a business receives returned merchandise previously sold to  a customer on credit,  Sales Returns and Allowances  is debited and  Accounts Receivable  is credited (decreased).  Work E8-1
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5 Receivables are valued at the ____________________________________ Excludes amounts that the company estimates ________________________________________ Credit losses Recorded as _______________________ Considered a normal and necessary risk of doing business ACCOUNTING FOR BAD  DEBTS
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6 Bad Debts Expense. ..
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This note was uploaded on 04/05/2008 for the course ACCT 252 taught by Professor Mills during the Spring '08 term at NMSU.

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252S07Ch8Slides_Student - Tools for Business Decision...

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