ACC 100 Chapter 7: Chapters 7, 8, 9

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12 May 2011

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Chapter 7 liquid assets and internal control. Subsidiary ledger: the detail for a number of individual items that collectively make up a single general ledger account. Control account: the general ledger account that is supposed by a subsidiary account. An account receivable signifies that an external party owes the entity money! Trade account receivable represents the amount owed to the entity by a customer in respect of revenue from the sale of goods / provision of services. Credit sales disadvantages: slows inflow of cash, risk of uncollectible accounts. Say in january of the following year, the company found out that one of their customers declared bankruptcy. The company has an a/r from the customer of ,000. We have to write-off the balance because it has no future economic benefit. Matching and conservatism (two principles that best reflect) Step 1: estimate the proportion of the year-end a/r balance expected to go bad" during the.

Related Questions

A credit sale of $5,275 to a customer would result in which of the following?

a. A debit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger.

b. A credit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger.

c. A credit to Sales and a credit to the customer's account in the accounts receivable subsidiary ledger.

d. A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger.

e. A credit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger.

cerisecoyote781

Moore company had an Accounts Receivable balance of $640,000 anda credit balance in allowance for Uncollectible Accounts of $33,400at January 1, 2011. During the year, the compnay recorded thefollowing transactions:

a. Sales on account $2,204,000

b. Sales returns and allowances by credit customers,$106,800

c. Collections from customers, $1,986,000

d. Worthless accounts written off $39,600

The company's past history indicates that 2.5 percent of its netcredit sales will not be collected.

1. Prepare T accounts for Accounts Receivable and Allowance forUncollectible Accounts. Enter the beginning balances, and show theeffects on these accounts of the items listed above, summarizingthe year's acitivity. Determine the ending balance of eachaccount.

2. Compute Uncollective Accounts Expense and determine theeneding balance of Allowance for Uncollectible Accounts under (a)the percentage of net sales method and (b) the accounts receivableaging method, assuming an aging of the accounts receivable showsthat $48,000 may be uncollectible.

3. Compute receivable turnover and day's sales uncollected,using the data from the accounts receivable aging method requiredin #2.

4. How do you explain that the two methods used in requirement 2result in different amounts for Uncollectible Accounts Expense?What rationale underlies each method?

lemondog684

15. Use thisinformation to answer the following question.
		The general ledger account forAccounts Receivable shows a debit balance of $50,000. Allowancefor
		Uncollectible Accounts has acredit balance of $1,000. Net sales for the year were $494,000. Inthe past,
		2 percent of sales have proveduncollectible, and an aging of accounts receivable accounts resultsin an
		estimate of $13,500 ofuncollectible accounts.

		Using thepercentage of net sales method, the Allowance for UncollectibleAccounts balance (after adjustment) would be? Please show yourwork.

purplehyena577

ACC 100 Chapter 7: Chapters 7, 8, 9

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