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Accounting Notes Ch.7

Accounting Notes Ch.7 - Accounting Notes/Chapter 7 Identify...

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Accounting Notes */Chapter 7/* Identify and classify receivables on the balance sheet - Trade receivables arise from the sale of goods or services to customers - Nontrade receivables arise from other sources - Classifying trade receivables Accounts receivable are claims against customers for sakes made on account with the specified credit terms Notes receivable are claims supported by written, formal promises to pay. Notes can arise from trade or nontrade arrangements. Credit card receivables arise from sales made with nonbank credit cards ALLOWANCE METHOD Explain why accountants must provide for uncollectible accounts to match revenues and expenses on the income statement and to present accounts receivable on the balance sheet A bad debt is an account receivable that proves uncollectible Recognize bad debt expense during the same period we recognize sale revenues Journalize entries under the allowance method to record the bad debts adjustment, write off uncollectible accounts, and recover bad debts -
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