Journalization: It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization‘s financial health. Rules of journal entry : The rules for journal entry are defined by 5 accounting components, Assets: Increase in asset should be debit and decrease should be credit. Liabilities: Increase in liabilities should be credit and decrease should be debit. Equity: Increase in Equity should be credit and decrease should be debit. Expense: Increase in expense should be debit and decrease should be credit. Revenue: Increase in revenue should be credit and decrease should be debit. Accounts receivable : It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account. Write off method for accounts receivable: This is a method of accounting for writing off bad debts expense by directly writing them off from sales revenue for the period for which they are uncollectible. It has impact on both the income statement and as well as the balance sheet as it reduces the amount of accounts receivable. To prepare: Journal entry to record the unexpected payment from an uncollectible account receivable for which the record has been made with direct write off method.

Question

Want to see the full answer?

Answer 1

Question

Chapter 7, Problem 3QS

To determine

Journalization:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization‘s financial health.

Rules of journal entry: The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

Accounts receivable: It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account.

Write off method for accounts receivable: This is a method of accounting for writing off bad debts expense by directly writing them off from sales revenue for the period for which they are uncollectible. It has impact on both the income statement and as well as the balance sheet as it reduces the amount of accounts receivable.

To prepare: Journal entry to record the unexpected payment from an uncollectible account receivable for which the record has been made with direct write off method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

The Coyle Shirt Company manufactures shirts in two departments: Cutting and Sewing. The company allocates manufacturing overhead using a single plantwide rate with direct labor hours as the allocation base. Estimated overhead costs for the year are $630,000, and estimated direct labor hours are 210,000. In June, the company incurred 18,200 direct labor hours. 1. 2. Compute the predetermined overhead allocation rate. Determine the amount of overhead allocated in June. The Coyle Shirt Company has refined its allocation system by separating manufacturing overhead costs into two cost pools-one for each department. (Click the icon to view the estimated costs and allocation data for each department.) 3. Compute the predetermined overhead allocation rates for each department. 4. Determine the total amount of overhead allocated in June. 1. Compute the predetermined overhead allocation rate. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter…

Decentralized businesses can have three responsibility centers that must be evaluated differently because of their functions. • Describe the three responsibility centers and give an example of each from your work. • Give an explanation about how each is evaluated. • Tell us why you would prefer to work in a centralized or decentralized organization. • Discuss which type of responsibility center you would prefer to manage and why.

Do fast this question answer general Accounting