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Amountsowedby customersthatresult fromthesaleofgoods

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Unformatted text preview: es that are expected to be collected in cash. Amounts owed by customers that result from the sale of goods and services. Claims for which formal instruments of credit are issued as proof of debt. “Nontrade” (interest, loans to officers, advances to employees, and income taxes refundable). Accounts Accounts Accounts Accounts Receivable Receivable Receivable Receivable Notes Notes Notes Notes Receivable Receivable Receivable Receivable Other Other Other Other Receivables Receivables Receivables Receivables Chapter 8-4 SO 1 Identify the different types of receivables. Accounts Receivable Accounts Receivable Two accounting issues: 1. Recognizing accounts receivable. 2. Valuing accounts receivable. Recognizing Accounts Receivable A service organization records a receivable when it provides service on account. A merchandiser records accounts receivable at the point of sale of merchandise on account. Chapter 8-5 SO 2 Explain how accounts receivable are recognized in the accounts. SO Accounts Receivable Accounts Receivable Illustration: Assume that you use your JCPenney Company credit card to purchase clothing with a sales price of $300. Assuming that you owe $300 at the end of the month, and JCPenney charges 1.5% per month on the balance due. Prepare the entry for JC Penney to record the sale and the adjusting entry to record interest revenue. Accounts receivable 300.00 Sales 300.00 Accounts receivable Interest revenue (300 x 1.5%) Chapter 8-6 4.50 4.50 SO 2 Explain how companies recognize accounts receivable. Accounts Receivable Accounts Receivable Valuing Accounts Receivables Classification Valuation (net realizable value) Uncollectible Accoun...
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