ADM 1340 Lecture Notes - Lecture 8: Current Asset, Promissory Note, Accounts Receivable

• School: University of Ottawa
• Department: Administration
• Course: ADM 1340
• Professor: Qiu Chen

Document Summary

Accounts receivables: are created when companies have sales to customers on open accounts. At the end of each accounting period, uncollectible accounts receivable are estimated and matched against sales in the same accounting period in which the sales occurred. Calculating or estimating the allowance aging of the accounts receivable listing . Step 2: record the adjusting entry to recognize bad debt expense. Bad debt expense = ending balance -/+ unadjusted balance. Anytime during the year when an account receivable is deemed uncollectible (the company gives up on collecting it) it should be written off. Written off: completely removed from the company"s accounts. 1. first reverse the entry made to write the account off: Allowance for doubtful accounts (afda): is a contra-account of accounts receivable. The amount is expected to not be collected. It is a current asset in the statement of financial position.