Company Side Recon.
These are checks written by the company that have not yet been presented to the bank for payment.
This acronym refers to a check that was deposited but returned because the payer had insufficient funds.
What is an NSF Check?
Under the terms 2/10, n/30, a customer must pay within this many days to receive a discount.
What is 10 days?
A $5,000 sale is made with terms 3/15, n/60. If the customer pays on day 12, this is the amount of the discount.
What is $150?
Cash received and recorded by the company but not yet received by the bank is called this.
What are Deposits Outstanding?
This is the required action for every item that appears on the "Book Side" of a bank reconciliation.
What is Record a Journal Entry?
This is the contra-asset account used to estimate the amount of receivables that will not be collected.
What is Allowance for Doubtful Accounts?
A company has $100,000 in A/R. They estimate 2% is uncollectible. If the Allowance account has a $500 credit balance, this is the Bad Debt Expense entry.
What is $1,500?
If the bank balance is $10,000, there are $2,000 in outstanding checks, and $500 in deposits in transit, this is the adjusted bank balance.
What is $8,500?
The bank collects a $1,000 note for the company plus $50 interest. This is the adjustment to the Book Balance.
What is Add $1,050?
This method of accounting for bad debts is required by GAAP because it follows the Matching Principle.
What is the Allowance Method?
Using the same facts as above, but the Allowance account has a $300 debit balance, this is the Bad Debt Expense entry.
What is $2,300?
On a bank reconciliation, a "Bank Service Charge" is treated this way on the Bank Statement side.
What is Nothing?
A company wrote a check for $150 but recorded it in the books as $510. This is the correction to the Book Balance.
What is Add $360?
Accounts Receivable minus the Allowance for Doubtful Accounts equals this value.
What is Net Realizable Value?
This is the interest earned on a $10,000, 6-month, 6% note receivable.
What is $300?
If a bank mistakenly records a $500 deposit as $50, this is the specific adjustment needed for the bank balance.
What is Add $450?
The bank statement shows a $2,100 collection of a note receivable, which includes $100 in interest. The bank also charged a $25 collection fee. What is the total net adjustment to the Book Balance?
What is Add $2,075?
When a specific customer’s account is "written off" under the allowance method, this is the effect on Total Assets.
What is No Effect?
This is the formula for the Accounts Receivable Turnover ratio.
What is Net Credit Sales / Average Net Accounts Receivable?