BUSI 1003 Lecture Notes - Income Tax, Aadhaar, Tl;Dr
28 Feb 2014
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Accounts receivable: credit terms extended to customers. Contact & question, freeze future transactions, charge interest. Notes receivable: more formal agreement, includes a maker and payee. Other receivables: can include interest receivable, taxes receivable, and receivables from employees or officers. Direct write off method: records bad debt expense only when an account is deemed to be worthless. Reduce accoutns receivable and write off the debt. Allowance method (contra asset account: set up allowance for doubtfull accounts based on an estimate. Aging of accounts receivable: what is the allowance accoutns function. Used so that it could be used in the future whenever you do give up on a bad debt. You don"t know who is going to flop payments but you have it just in case they do. If payment is collected after the right off: the right of entry is reversed, the cash collection is recorded. Identical units purchased at different unit cost during a period.
