ACCT 3001 Lecture Notes - Lecture 4: Amortization Schedule, Accounts Receivable, Market Rate
Document Summary
Chapter 7 receivables (on own- cash section pages 326-328) Receivables: claims held against customers and others for money, goods, or services. Accounts receivable: oral promises of the purchaser to pay for goods and services sold. Notes receivable: written promises to pay a sum of money on specified future date. Trade receivables: occur in the ordinary operations of business by providing goods/services to customers. Accounts receivable are recognized when a company satisfies its performance obligation by transferring goods or services to the customer (revenue recognition principle) The transaction price is the amount of consideration that a company expects to receive from a customer in exchange for transferring goods or services. 4 items may affect the transaction price and a/r balance: trade discounts. Only record the price paid, without a separate section listing the discount: sales returns and allowances. Provision for a return or allowance if customer is dissatisfied with product or services.
