Friday, November 16, 2012

Accounts receivable

http://www.youtube.com/watch?v=RRfbSCr9avM&feature=autoplay&list=PL55FF496411ACF0A3&playnext=4



Sale on account
Dr:  Account /Receivable
Cr: sales
Return
Dr: sales or sales Return and allowance
Cr: Account /Receivable
Collect
Dr: cash
Cr: A/R
Rollover
Dr: Notes/Receivable
Cr: Account /Receivable
Write off
Dr: allowance for doubtful account
Cr: Account /Receivable
Adjusting entries
Dr: Bad debt expense      XX
Cr: Allowance for doubtful account    XX
Estimate allowance for doubtful account, two ways to get this
(1)% of sales method gives you the amount of adjusting journal entries, whatever the percentage of net sale, which is the amount (XX) of adjusting journal entries
Or
(2)Aging of account receivable= end balance allowance (find the difference between the current balance in the allowance and the desired ending balance, the difference is the amount ( XX ) follow the allowance for doubtful account)

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