chapter 7 15 lo 4 explain accounting issues related

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

Ask a homework question - tutors are online