ACC 100 Chapter Notes - Chapter 7: Subledger, General Ledger, Debits And Credits

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violetplatypus517

19 Oct 2014

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Subsidiary ledger the detail for a number of individual items that collectively make up a single general ledger account. Commonly supports accounts receivable, plant & equipment, and accounts payable. Control account the general ledger account that is supported by a subsidiary ledger. Direct write-off method the recognition of bad debts expense at the point an account is written off as uncollectible. Allowance method a method of estimating bad debts on the basis of either the net credit sales of the period or the accounts receivable at the end of the period. Allowance for doubtful accounts is a contra account under accounts receivable. 2 approaches to allowance method for bad debts: Percentage of net credit sales approach (income statement method) If company has been in business for enough years, it may be able to use past relationship between bad debts and net credit sales to predict bad debt amounts. Relates bad debts to the sales of the period.

Related Questions

If the allowance method of accounting for uncollectible receivables method was used and an estimate was made at year end, Dec.31 ........what general ledger accounts are debited and credited in JANUARY when a particular customer's account is identified as uncollectible?

debit Allowance for Bad Debts; credit Accounts Receivable

debit Bad Debts Expense; credit Accounts Receivable

debit Bad Debts Expense; credit Allowance for Bad Debts

debit Bad Debts Expense; credit Allowance for Bad Debts: incorrect.

debit Accounts Receivable; credit Allowance for Bad Debts

bluemuskrat927

Information related to Hermesch Company for 2012 is summarizedbelow.

Total credit sales $2,200,000
Accounts receivable at December 31 825,000
Bad debts written off 33,000

What amount of bad debts expense will Hermesch Company report if ituses the direct writeoff method of accounting for bad debts?
$ ______

Assume that Hermesch Company estimates its bad debts expense to be2% of credit sales. What amount of bad debts expense will Hermeschrecord if it has an Allowance for Doubtful Accounts credit balanceof $4,000?
$ ______

Assume that Hermesch Company estimates its bad debts expense basedon 6% of accounts receivable. What amount of bad debts expense willHermesch record if it has an Allowance for Doubtful Accounts creditbalance of $3,000?
$ ______

Assume the same facts as in the question above, except that thereis a $3,000 debit balance in Allowance for Doubtful Accounts. Whatamount of bad debts expense will Hermesch record?
$ ______

Could you do all incorrect ones
P9-2A (a-d)

Information related to Hermesch Company for 2008 is summarizedbelow.
Total credit sales $2,200,000
Accounts receivable at December 31 825,000
Bad debts written off 33,000

Correct.

What amount of bad debts expense will Hermesch Company report if ituses the direct writeoff method of accounting for bad debts?
$ 33000

Correct.

Assume that Hermesch Company estimates its bad debts expense to be2% of credit sales. What amount of bad debts expense will Hermeschrecord if it has an Allowance for Doubtful Accounts credit balanceof $4,000?
$ 44000

Incorrect.

Assume that Hermesch Company estimates its bad debts expense basedon 6% of accounts receivable. What amount of bad debts expense willHermesch record if it has an Allowance for Doubtful Accounts creditbalance of $3,000?
$

Incorrect.

Assume that Hermesch Company estimates its bad debts expense basedon 6% of accounts receivable. There is a $3,000 debit balance inAllowance for Doubtful Accounts. What amount of bad debts expensewill Hermesch record?
$

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ACC 100 Chapter Notes - Chapter 7: Subledger, General Ledger, Debits And Credits

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