Receivables (Chapter 8)

Question 1

Account Receivable

Answer 1

Oral Promises to pay debts and classifies as CA.

Question 2

AR Format

Answer 2

+ Beg. Balance, credit Sales/-Write-offs, conversation to notes payable, cash collected=remaining balance is the ending balance.

Question 3

Net AR

Answer 3

Balance of - receivables that may be uncollectible determined by an aging of year-end receivables.

Question 4

Valuation of AR-Gross Method

Answer 4

Without regard to the available discount.

Question 5

Valuation of AR-Net Method

Answer 5

Records sales and accounts receivable net of the available discount. If payment is received after the discount period, a sales discount not taken account (revenue) must be credited.

Question 6

Trade discount

Answer 6

Qty discounts and Sales revenue and A/R will be net of trade discount.

Question 7

Sales returns and allowances

Answer 7

Goods returned represents deductions from A/R and sales

Question 8

Allowances

Answer 8

If past exp shows that a material % or recev. Are returns should be established

Question 9

JE for anticipated returns

Answer 9

Sales returns(contra accounts) xxxx Allowance for sales returns (contra A/R) xxxxc

Question 10

JE for uncollectable

Answer 10

DR Cash/Cr Uncollectible accounts recovered (revenue a/c)

Question 11

Subsequent collection of uncollectible Direct write off method

Answer 11

Dr cash/CR Uncollectible accounts recovered (revenue a/c)

Question 12

Format of % sales method

Answer 12

CR beg balance, c/yr bad debt (%sales) DR Write-offs Ending balance is the Plug figure.