Describe Accounts Receivable and how they occur and are recorded
Accounts receivable has this "natural balance"
What is "debit".
The name of the accounting principle that determines if it is OK to use the direct write off method.
What is materiality
What are the net sales amount and the % that is expected to "go bad"?
Describe the A/R aging report
What is a list of A/R by the due date?
The allowance for doubtful accounts is what kind of account (hint, it means "opposite").
What is a "contra" account?
The entry required to directly write off a customer's account.
What is Debit Bad Debt Expense and Credit Accounts Receivable.
The entry to record an account write off if a company uses the % of sales method to set up an allowance.
What is Dr. AFDA and Cr. A/R?
The entry to set up the AFDA when using the A/R aging method
What is DR Bad Debt Expense and CR AFDA
What is "net receivables"?
True or false, writing off a customer account means they do not owe the money any more.
What is false.
Describe net sales.
What is total sales less returns and allowances?
This is what we call invoices that are not past due.
What is current?
How we describe a 2% discount for paying withing 10 days or the invoice total paid in 30 days?
What is 2/10 net 30?
What is the entry to record the payment for a directly written off account that the customer has now paid.
What is Dr. A/R, Credit Bad Debt expense, Cr. A/R and Dr. Cash?
What entry is needed if a previously written off account is now paid and the company uses the Percentage of net sales method to record the AFDA?
DR A/R
CR AFDA
DR Cash
CR A/R
A list of A/R by due date.
What is the A/R Aging report
What I do if a customer with an A/R balance notifies me they have gone bankrupt.
What is write off their account?
What are materiality and/or the matching principle.
True or false -- Bankrupt clients should have their accounts written off.
What is true.
The name for the legal filing a company makes when it cannot pay it's bills.
What is Bankruptcy?