Chapter 13 Accounts Receivable（课件）-《实用会计英语》同步教学（大连理工大学出版社）

ACCOUNTS RECEIVABLE CHAPTER 13 13-1 2 2 Account receivable Sales on credit to customers Account receivable Accounts owned to the company 13-1 Account receivable Credit sales Collection The balance of Accounts receivable account Increase Decrease 13-1 3 3 Account receivable Suppose the sale is made for cash… The entry? Cash 1,000 Revenues from Sales 1,000 13-1 Account receivable Suppose the sale is made on credit… The entry? Accounts Receivable 1,000 Revenues from Sales 1,000 13-1 Account receivable When the debt is collected … The entry? Cash 1,000 Account receivable 1,000 13-1 Uncollectible accounts or bad debts The accounts that can’t be collected are called uncollectible accounts or bad debts. 13-1 Uncollectible accounts Under the matching rule, expenses should be matched against with the sales. The uncollectible accounts are incurred in the process of making sales revenues, and they should be recorded as the expenses of the same period of sales. 13-1 Uncollectible accounts Now, let’s look at an example for George Ross Company 13-1 4 3 Uncollectible accounts Example Suppose that George Ross Company has $6,000 of accounts receivable for the whole year. At the end of the year, accountants estimate that about $200 of the $6,000 of accounts to be uncollectible. In the next year, the bad debt actually occurs.Thus the uncollectible accounts expense for this year will be $6,000. 13-1 5 3 Uncollectible accounts Example Dec. 31 Uncollectible Accounts Expense $200 Allowance for Uncollectible Accounts $200 When bad debts actually occurred Allowance for Uncollectible Accounts $200 Accounts Receivable $200 13-1 6 6 Methods used in estimating the allowance 1. Percentage of credit sales method 2. Accounts receivable aging method 3. Percentage of receivables method 13-1 8 6 Percentage of credit sales method Method