BU127 Chapter Notes - Chapter 7: Bank Statement, Revenue Recognition
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BU127 Full Course Notes
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Document Summary
Point at which ownership changes hands (and revenue is recognized) in shipping contract: Sales returns and allowances reduction of gross sales revenues for return of or allowances for unsatisfactory goods. Allowance method bases bad debt expense on an estimate of uncollectible accounts. Aging of tr method estimates uncollectible amounts based on age of each tr. Reconciliation of cash accounts and bank statements process of verifying accuracy of both bank statement & cash accounts of business. Monthly report that shows deposits recorded, cheques cleared, other debits and credits, and a balance. Nsf cheque a cheque processed by the bank without sufficient funds in writer"s account results in debiting it back into tr from cash. Bank service charges must always be reconciled onto books. Interest paid by bank to company must be reconciled to books. Deposits in transit deposits sent by company to bank that bank has not yet recorded need to be added to bank records.
