The entry the company would need to make is allowance

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Unformatted text preview: icular account. The entry the Company would need to make is: Allowance for Doubtful Accounts Accounts Receivable 50 $ 50 $ 50 Reinstatement of a Receivable: Then, if a customer that is previous'y"written off' makes a payment of 525, the company must make two entries to record the transaction. 1. To reinstate the receivable" and 2. To record the payment. Accounts Receivable Cash $25 Allowance for Doubtful Accounts $25 Accounts Receivable $25 $ 25 Direct Write Off method: Often used by smaller, nonpublic companies, not GAAP. With this method the company does not make any adjusting entries for bad debt expense prior to the account being written off (violates matching principle). When a customer's account is written off, the company makes the following entry: Debit: Bad Debt Expense and Credit: Accounts Receivable Internal Controls: Policies and Procedures a company has in place to safeguard company assets fr...
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This note was uploaded on 01/23/2014 for the course ACG 2021 taught by Professor Linkovich during the Spring '08 term at University of South Florida - Tampa.

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