Chapter 7 Flashcards
1
Q
2 methods of write off
A
Direct write off
Allowance method
2
Q
Direct method can’t
A
Match sales and expenses
3
Q
Allowance method can
A
Record estimated bad debt in the period when the related sales are recorded
4
Q
Allowance for doubtful accounts
A
Contra asset
5
Q
Allowance methods
A
Percent of sales
Percent of ar
Aging of Ar
6
Q
Interest computation
A
Principle of note X annual interest X time expressed (if in days x360)
7
Q
Ar turnover
A
Net sales/ average Ar
