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16 Cards in this Set
- Front
- Back
Entry to write off an uncollectible account (Direct Write-Off)
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Bad Debt Expense...Debit
Accounts Receivable......Credit |
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Entry for Reinstatement and Receipt of cash
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Accounts Receivable...Debit
Bad Debt Expense....Credit Cash...Debit Accounts Receivable...Credit |
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Entry for Estimated Bad Debts
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Bad Debt Expense....Debit
Allowance for Doubtful Accounts...Credit (Uncollectible accounts estimate) |
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Entry for Write-offs to the Allowance Account
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Allowance for Doubtful Accounts...Debit
Accounts Receivable...Credit |
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Entry for Reinstatement and Collection of Write-Offs
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Accounts Receivable...Debit
Allowance for doubtful accounts...Credit Cash...Debit Accounts Receivable...Credit |
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Estimating Bad Debt Expense
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Bad Debt Expense =
Credit Sales x Bad Debt Expense as a Percent of Credit Sales |
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Adjusting entry for uncollectible accounts (end of accounting period)
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Bad debt expense...Debit
Allowance for Doubtful Accounts...Credit (Uncollectible accounts estimate) |
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Process of Aging the Receivables
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Step 1 - The due date of each account is determined.
Step 2 - The number of days each account is past due is determined. This is the number of days between the due date fo the account and the date fo the analysis Step 3 - Each account is placed in ann aged class account according to its days past due. Step 4 - The totals for each aged class are determined Step 5 - The total for each aged class is multiplied by an estimated percentage of uncollectible accounts for each aged class. Step 6 - The estimated total of uncollectible accounts is determined as the sum of the uncollectible accounts for each aged class |
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Interest on a Note (calculation)
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Interest = Face Amount x Interest Rate x (Term/360 Days)
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Maturity Value
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Face amount + Interest (amount that must be paid at the due date of the note)
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Entry fro the Receipt of a Note (from customer to replace an account receivable)
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Notes Receivable...Debit
Accounts Receivable...Credit |
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Entry of Maturity Value (on due date)
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Cash...Debit
Notes Receivable...Credit Interest Revenue...Credit |
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Entry of Dishonored Note Receivable (on due date)
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Accounts Receivable...Debit
Notes Receivable...Credit Interest Revenue...Credit |
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Adjusting entry for accrued interest at the end of accounting period
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Notes Receivable...Debit
Accounts Receivable...Credit Interest Receivable...Debit Interest Revenue...Credit Accrued interest (between issuance and end of period) Cash...Debit Notes Receivable...Credit Interest Receivable...Credit (from end of last period) Interest Revenue...Credit (total interest - interest receivable) |
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Accounts Receivable Turnover
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Accounts Receivable Turnover = Net Sales/Average Accounts Receivable
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Number of Days' Sales in Receivables
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Number of Days' Sales in Receivables = Average Accounts Receivable / Average Daily Sales
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