ACTG 1P91 Lecture Notes - Lecture 8: Balance Sheet, Accounts Receivable, Business Cycle

• School: Brock University
• Department: Accounting
• Course: ACTG 1P91
• Professor: Staci Kenno

Document Summary

Reporting and interpreting receivables, bad debt expenses and interest revenue: chapter 8. Record at gross of net of discount. Record sales at gross, discount as expense. Decrease revenue when goods returned or allowances granted. May want to set up a reserve. If you sell on credit, some customers probably wont pay. Matching costs of granting credit to period benefitted. Record bad debt only when customer does to pay. Usually don"t dis(cid:272)o(cid:448)er (cid:449)ho (cid:449)ont pay until 1-3 years after sale. Cost of granting credit to period in which you recognized credit sales revenue. When discovered specific amount that is uncollectable. Not at time estimate expense under allowance method. Don"t kno(cid:449) spe(cid:272)ifi(cid:272) a(cid:272)(cid:272)ounts that (cid:449)ill not pay. Balance sheet disclosure (cid:4666)(cid:1867)(cid:1875)(cid:1853)(cid:1866)(cid:1855)(cid:1857) (cid:1858)(cid:1867)(cid:1870) (cid:1856)(cid:1867)(cid:1873)(cid:1854)(cid:1872)(cid:1858)(cid:1873) (cid:1853)(cid:1855)(cid:1855)(cid:1867)(cid:1873)(cid:1866)(cid:1872)(cid:1871)(cid:4667) (cid:1855)(cid:1855)(cid:1867)(cid:1873)(cid:1866)(cid:1872)(cid:1871) (cid:1857)(cid:1874)(cid:1857)(cid:1874)(cid:1853)(cid:1854)(cid:1857) (cid:1857)(cid:1872) (cid:1870)(cid:1857)(cid:1853)(cid:1853)(cid:1854)(cid:1857) (cid:1874)(cid:1853)(cid:1873)(cid:1857) Periodically check accuracy using aging method (cid:862)aging(cid:863) the re(cid:272)ei(cid:448)a(cid:271)les. Track the length of time account have been outstanding, the more likely it is uncollectible. In canada must use aging for income tax purposes.