Accounts receivable Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business. Bad debt expense: Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense. Allowance method: It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account. To journalize: The September month transactions using allowance method.

Question

Want to see the full answer?

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 8.27AP

(1)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account.

To journalize: The September month transactions using allowance method.

(2)

To determine

Direct write-off method:

Under this method, accounts would be written off only when it is determined that the receivables from a customer remain uncollectible.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To journalize: The September month transactions using direct-write off method.

(3)

To determine

To Show: The amount of bad debts expense that will be reported on the income statement under each of the two methods, and describe which amount best matches expenses with revenue.

(4)

To determine

To identify: The amount that would be reported as net accounts receivable on the balance sheet under each of the two methods and explain which amount is more accurate.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Accounting for uncollectible accounts using the allowance (percent-of-sales) and direct write-off methods and reporting receivables on the balance sheet On August 31, 2018, Bouquet Floral Supply had a $140,000 debit balance in Accounts Receivable and a 55,600 credit balance in Allowance for Bad Debts. During September, Bouquet made: Sales on account, $550,000. Ignore Cost of Goods Sold. Collections on account, $584,000. Write-offs of uncollectible receivables, $4,000. Requirements Journalize all September entries using the allowance method. Bad debts expense was estimated at 2% of credit sales. Show all September activity in Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts). Using the same facts, assume that Bouquet used the direct write-off method to account for uncollectible receivables. Journalize all September entries using the direct write-off method. Post to Accounts Receivable and Bad Debts Expense, and show their balances on…

Accounting for uncollectible accounts using the allowance (percent of-sales) and direct write-off methods and reporting receivables on the balance sheet On August 31, 2018, Forget-Me-Not Floral Supply had a $140,000 debit balance in Accounts Receivable and a $5,600 credit balance in Allowance for Bad Debts. During September, Forget-Me-Not made the following transactions: Sales on account, $530,000. Ignore Cost of Goods Sold. Collections on account, $573,000. Write-offs of uncollectible receivables, 56,000. Requirements Journalize all September entries using the allowance method. Bad debts expense was estimated at 2% of credit sales. Show all September activity in Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts). Using the same facts, assume that Forget-Me-Not used the direct write-off method to account for uncollectible receivables. Journalize all September entries using the direct write-off method. Post to Accounts Receivable and Bad…

Using the following accounts, complete all journal entries: Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense Credit Card Expense Sales Discount Sales Revenue Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The uncollectible percentage is 2.3% for the income statement method, and 3.6% for the balance sheet method. PLEASE NOTE: All dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). Record the year-end adjusting entry for 2018 bad debt using the income statement method. DR CR Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. DR CR Assume there was a previous debit balance in Allowance for Doubtful Accounts of $10,220, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. Income Statement Method: DR…

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 8.27AP

(1)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account.

To journalize: The September month transactions using allowance method.

(2)

To determine

Direct write-off method:

Under this method, accounts would be written off only when it is determined that the receivables from a customer remain uncollectible.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To journalize: The September month transactions using direct-write off method.

(3)

To determine

To Show: The amount of bad debts expense that will be reported on the income statement under each of the two methods, and describe which amount best matches expenses with revenue.

(4)

To determine

To identify: The amount that would be reported as net accounts receivable on the balance sheet under each of the two methods and explain which amount is more accurate.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 8.27AP

(1)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account.

To journalize: The September month transactions using allowance method.

(2)

To determine

Direct write-off method:

Under this method, accounts would be written off only when it is determined that the receivables from a customer remain uncollectible.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To journalize: The September month transactions using direct-write off method.

(3)

To determine

To Show: The amount of bad debts expense that will be reported on the income statement under each of the two methods, and describe which amount best matches expenses with revenue.

(4)

To determine

To identify: The amount that would be reported as net accounts receivable on the balance sheet under each of the two methods and explain which amount is more accurate.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 8.27AP

(1)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account.

To journalize: The September month transactions using allowance method.

(2)

To determine

Direct write-off method:

Under this method, accounts would be written off only when it is determined that the receivables from a customer remain uncollectible.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To journalize: The September month transactions using direct-write off method.

(3)

To determine

To Show: The amount of bad debts expense that will be reported on the income statement under each of the two methods, and describe which amount best matches expenses with revenue.

(4)

To determine

To identify: The amount that would be reported as net accounts receivable on the balance sheet under each of the two methods and explain which amount is more accurate.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 8, Problem 8.27AP

(1)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account.

To journalize: The September month transactions using allowance method.

(2)

To determine

Direct write-off method:

Under this method, accounts would be written off only when it is determined that the receivables from a customer remain uncollectible.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To journalize: The September month transactions using direct-write off method.

(3)

To determine

To Show: The amount of bad debts expense that will be reported on the income statement under each of the two methods, and describe which amount best matches expenses with revenue.

(4)

To determine

To identify: The amount that would be reported as net accounts receivable on the balance sheet under each of the two methods and explain which amount is more accurate.

Answer 6

Chapter 8, Problem 8.27AP

(1)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account.

To journalize: The September month transactions using allowance method.

Answer 7

Chapter 8, Problem 8.27AP

(1)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account.

To journalize: The September month transactions using allowance method.

Answer 8

(2)

To determine

Direct write-off method:

Under this method, accounts would be written off only when it is determined that the receivables from a customer remain uncollectible.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To journalize: The September month transactions using direct-write off method.

Answer 9

(2)

To determine

Direct write-off method:

Under this method, accounts would be written off only when it is determined that the receivables from a customer remain uncollectible.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To journalize: The September month transactions using direct-write off method.

Answer 10

(3)

To determine

To Show: The amount of bad debts expense that will be reported on the income statement under each of the two methods, and describe which amount best matches expenses with revenue.

Answer 11

(3)

To determine

To Show: The amount of bad debts expense that will be reported on the income statement under each of the two methods, and describe which amount best matches expenses with revenue.

Answer 12

(4)

To determine

To identify: The amount that would be reported as net accounts receivable on the balance sheet under each of the two methods and explain which amount is more accurate.

Answer 13

(4)

To determine

To identify: The amount that would be reported as net accounts receivable on the balance sheet under each of the two methods and explain which amount is more accurate.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 17

Ch. 8 - Prob. 1QC Ch. 8 - When recording credit card or debit card sales...Ch. 8 - Which of the following is a limitation of the...Ch. 8 - The entry to record a write-off of an...Ch. 8 - Brickman Corporation uses the allowance method to...Ch. 8 - Brickmans ending balance of Accounts Receivable is...Ch. 8 - At December 31 year-end, Crain Corporation has an...Ch. 8 - Using the data in the preceding question, what...Ch. 8 - At year-end, Schultz, Inc. has cash of 11,600,...Ch. 8 - Using the data in the preceding question, assume...

Solution Summary: The author explains the allowance method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period.

Concept explainers

Videos

To Show: The amount of bad debts expense that will be reported on the income statement under each of the two methods, and describe which amount best matches expenses with revenue.

To identify: The amount that would be reported as net accounts receivable on the balance sheet under each of the two methods and explain which amount is more accurate.

Want to see the full answer?

Chapter 8 Solutions