ACTG 1P12 Lecture Notes - Lecture 3: Subledger, General Ledger, Accounts Payable
Document Summary
For merchandise return: dr sales returns and allowances and cr a/r. To record collection and discount: dr cash and sales discount and cr a/r. A subsidiary ledger group of accounts that provides detail of a control account in the. A control account is an account in the general ledger that summarizes the detail for a general ledger subsidiary ledger and controls it. Credit loses from uncollectible receivables are dr to bad debts expense. Allowance method a method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period. Dr bad debts expense and cr afda. Most common is to use a percentage of outstanding receivables to determine the. Aging the accounts receivable stratifying the percentage classifies customer balances by the length of time they have been unpaid, which can improve the reliability of the estimate. Accounts receivable x estimated percentage uncollectible = estimated uncollectible.