Financial Accounting Test 3 (Chapters 7–10) – comprehensive
Financial Accounting
study guide
Test
and3 exam
(Chapters
review
7–10)
material.pdf
– comprehensive
Financial Accounting
study guide
Test
and3 exam
(Chapters
review
7–10)
material.pdf
– comprehensive study guide and exam review material.pdf
Financial Accounting Test 3
(Chapters 7–10) –
comprehensive study guide
and exam review material
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Financial Accounting Test 3 (Chapters 7–10) – comprehensive
Financial Accounting
study guide
Test
and3 exam
(Chapters
review
7–10)
material.pdf
– comprehensive
Financial Accounting
study guide
Test
and3 exam
(Chapters
review
7–10)
material.pdf
– comprehensive study guide and exam review material.pdf
,Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf
Accounts receivable (AR) Amounts owed by customers from credit sales
Two types of sales Cash sales and credit sales
What ledger tracks individual customer balances Subsidiary ledger
What does the general ledger show for AR Total accounts receivable balance
Why do companies use third-party credit cards To avoid costs of credit checks, collections, and administration
What is the typical fee for credit card companies 1-5% of the transaction
Direct write-off method Records bad debt only when accounts become uncollectible
Why is the direct write-off method not GAAP It violates the matching principle
Allowance method Estimates bad debts in advance to match expenses with revenue
Allowance for doubtful accounts Contra asset account with a credit balance
Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf
, Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf
Net realizable value (NRV) Accounts receivable minus allowance for doubtful accounts
Adjusting entry for bad debts (allowance method) Debit bad debt expense and credit allowance
Write-off entry under allowance method Debit allowance and credit accounts receivable
Effect of write-off on NRV No effect
Recovery of bad debt (allowance method) Reverse write-off then record cash collection
Percentage of sales method Estimates bad debt based on current period sales
Percentage of receivables method Estimates bad debt based on ending AR balance
Aging of receivables method Classifies AR by age and applies different percentages
Factoring receivables Selling accounts receivable for cash minus a fee
Pledging receivables Using AR as collateral for a loan
Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf
Financial Accounting
study guide
Test
and3 exam
(Chapters
review
7–10)
material.pdf
– comprehensive
Financial Accounting
study guide
Test
and3 exam
(Chapters
review
7–10)
material.pdf
– comprehensive study guide and exam review material.pdf
Financial Accounting Test 3
(Chapters 7–10) –
comprehensive study guide
and exam review material
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Financial Accounting Test 3 (Chapters 7–10) – comprehensive
Financial Accounting
study guide
Test
and3 exam
(Chapters
review
7–10)
material.pdf
– comprehensive
Financial Accounting
study guide
Test
and3 exam
(Chapters
review
7–10)
material.pdf
– comprehensive study guide and exam review material.pdf
,Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf
Accounts receivable (AR) Amounts owed by customers from credit sales
Two types of sales Cash sales and credit sales
What ledger tracks individual customer balances Subsidiary ledger
What does the general ledger show for AR Total accounts receivable balance
Why do companies use third-party credit cards To avoid costs of credit checks, collections, and administration
What is the typical fee for credit card companies 1-5% of the transaction
Direct write-off method Records bad debt only when accounts become uncollectible
Why is the direct write-off method not GAAP It violates the matching principle
Allowance method Estimates bad debts in advance to match expenses with revenue
Allowance for doubtful accounts Contra asset account with a credit balance
Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf
, Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf
Net realizable value (NRV) Accounts receivable minus allowance for doubtful accounts
Adjusting entry for bad debts (allowance method) Debit bad debt expense and credit allowance
Write-off entry under allowance method Debit allowance and credit accounts receivable
Effect of write-off on NRV No effect
Recovery of bad debt (allowance method) Reverse write-off then record cash collection
Percentage of sales method Estimates bad debt based on current period sales
Percentage of receivables method Estimates bad debt based on ending AR balance
Aging of receivables method Classifies AR by age and applies different percentages
Factoring receivables Selling accounts receivable for cash minus a fee
Pledging receivables Using AR as collateral for a loan
Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf Financial Accounting Test 3 (chapter 7,8,9 and 10).pdf
