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4 Cards in this Set
- Front
- Back
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Two most common methods of measuring bad debt expense and allowance for uncollectible accounts! |
A) Percentage of Sales- Income Statement Method B) Percentage of Receivable (Balance Sheet Approach) |
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Balance Sheet Approach- Bad Debt Expense |
Estimates the balance that should be recorded in the allowance based on the collectibility of ending gross accounts receivable. Bad Debt expense is the amount necessary to adjust the allowance. An entity using the balance sheet approach generally prepares an aging schedule for accts receivable.Move |
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Movement of T Account of Acc Receivable and Allowance for Uncollectible. |
Account Receivable Beg Balance AccReceivable Plus: Credit Sales during period Less: Cash Collected Less: Acct Rec Written Off ____________________________________Ending Account Receivable __________________________________
Allowance for Uncollectible Beg Balance Plus: Bad Debt Expense Less: Account Write off Plus: Collection of Receivable previouslt written off
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Inventory Initial Measurement |
1) Price paid or consideration 2) Import duties and other unrecoverable taxes 3) Handling, insurance, freight inn and other cost to bring the inventory and materials ready for use. |
