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chapter 7 15 lo 4 explain accounting issues related

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Unformatted text preview: (to account for reduction in value due to TVM). However, in practice, companies ignore interest revenue related to accounts receivable because, for current assets, the amount of the discount is not usually material in relation to the net income for the period (due to short time period.) Chapter 7-15 LO 4 Explain accounting issues related to recognition of accounts receivable. Accounting for Accounts Receivable Accounting for Accounts Receivable Accounting Below are the “normal” G/L balances for A/R (asset) and its associated Below are the “normal” G/L balances for A/R (asset) and its associated “normal” G/L balances for A/R (asset) and its associated “normal” G/L balances for A/R (asset) and its associated Allowance for Doubtful Accounts (contra asset). However, it is possible Allowance for Doubtful Accounts (contra asset). However, it is possible possible possible for the Allowance to “go debit” if the previous year allowance was ffor the Allowance to “go debit” if the previous year allowance was or for underestimated (relative to future write­offs). underestimated (relative to future write­offs). Accounts Receivable Allowance for Doubtful Accounts Beg. 500 25 Be...
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