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Week 04
What are the 2 methods for recognizing Uncollectible Accounts
Describe Direct write-off method
Allowance Methods
What is the accounts receivables ledger?
It is a ledger that containers the A/R from each customer. For instance
A/R Ledger A/R = A/R(customer 1) + A/R(customer 2) + A/R(customer 3) + ...
Time of Sale Equation
Cash(A) + A/R - Allowance for Doubtful Accounts) = Revenue - Expense
What are the different names for doubtful accounts?
Uncollectible or bad debts.
Bad debt expense account are also called
Provisions for uncollectible accounts or provisions for doubtful accounts because they sound more pleasant.
Describe the A/R Journal
What type of accounts are an expense account and is it on the left or right side of the T-account?
It's a debit account. However, it is placed on the right side of the T-account. It is balanced by the shareholder equity Dr. Expense (+E,-SE)
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