Cash & A/R

Question 1

Balance Per Bank Statement

Answer 1

+ Deposits in transit
+ Cash on hand
- Outstanding Checks
+/- Errors

Question 2

Balance Per Books

Answer 2

\+ Interest earned
\+ Notes collected
- Service charges
- NSF checks
\+/- Errors

Question 3

Bank Rec Journal Entries

Answer 3

Interest Earned on Account
Dr. Cash
Cr. Interest Revenue

Note Receivable collected from Bank
Dr. Cash
Cr. Note Receivable
Cr. Interest Revenue

Service Charge
Dr. Service charge expense
Cr. Cash

NSF check received from customer
Dr. Accounts Receivable
Cr. Cash

Question 4

A/R and Shipping charges

Answer 4

If its FOB shipping buyer bears the shipping cost and if FOB destination the seller bears the shipping cost

So if it’s FOB shipping and the seller pays, then they most likely will record a receivable for the amount

Question 5

How to calculate AR with inventory stuff

Answer 5

First find COGS then multiply by markup and then subtract the collections

Question 6

Direct Write Off Journal Entires

Answer 6

An account deemed uncollectible
Dr. Bad debt expense
Cr. Accounts Receivable

Account written off then collected
Dr. Cash
Cr. Bad debts recovered

Question 7

Allowance Method Journal Entries

Answer 7

End of year adjusting entry
Dr. Bad debt expense
Cr. Allowance for Doubtful Accounts

Write Off
Dr. Allowance for Doubtful accounts
Cr. Accounts Receivable

Account written off then collected
Dr. Accounts Receivable
Cr. Allowance for doubtful accounts

Dr. Cash
Cr. Accounts Receivable

Question 8

What do claims mean?

Answer 8

A claim means you should record a receivable because you claim that they owe you money for messing something up

Question 9

Constant dollar basis of khara

Answer 9

Nonmonetary items are restated based on the new price level while monetary stays the same

Question 10

Accrued Interest Receivable

Answer 10

Refers to the cash amount due so you use the face amount to calculate

Question 11

How to calculate interest revenue

Answer 11

Difference between amount received(payments) of notes minus the present value of the note

Question 12

Note Receivable Journal Entries

Answer 12

Date of Sale
Dr. Note Receivable
Cr. Sales

Interest After period
Dr. Interest Receivable
Cr. Interest Income
Add this value each year to face amount and calculate

End of Note period
Dr. Cash
Cr. Interest receivable(Add up all interest receivable)
Cr. Note Receivable(Face amount)

Question 13

Interest Revenue when there is the discounted rate

Answer 13

Divide Face value of note by present value of annuity factor or present value factor then multiply that number by the number of payments due. Then multiply the payment by annuity factor of the discount rate and then subtract.

Question 14

Proceeds of note with a discount value

Answer 14

• Multiply face amount by (1*rate)
• For the discount multiply that number by discount rate and don’t forget number of months
• Subtract

Also pay attention if the note term is a year or not, because if it’s less than a year then you skip first step

Question 15

Factor without recourse liability Journal Entry

Answer 15

Dr. Cash (sale of receivables - % charges & Hold back)
Dr. Receivable from Factor(Sale * % holdback)
DR. Loss on Sale or Receivables( Sale * factor%)
Cr. Accounts Receivable

Dr. Sales returns & allowance (holdback %)
Cr. Receivable from factor

Question 16

Factor with recourse liability Journal Entry

Answer 16

Just add a credit for recourse liability and add to sum of loss on receivable on the debit side

Question 17

End accounts receivable and recoveries

Answer 17

Recoveries are not included in ending balance for accounts receivable because they are but back into A/R and taken back out