会计学英语电子版08.pptVIP

Financial Accounting:Tools for Business Decision Making, 4th Edition;Chapter 8;Chapter 8Reporting and Analyzing Receivables; Explain the statement presentation of receivables. Describe the principles of sound accounts receivable management. Identify ratios to analyze a companys receivables. Describe methods to accelerate the receipt of cash from receivables.;Amounts due from individuals and other companies-expected to be collected in cash Three major classes of receivables Accounts Receivable - amounts owed by customers on account, expected to be collected within 30-60 days Notes Receivable - claims for which formal instruments of credit are issued Other Receivables - non-trade receivables, for example, interest receivable and advances to employees;Receivables Differ Depending On...;Accounts Receivable...;Two accounting issues associated with accounts receivable: Recognizing accounts receivable. Valuing accounts receivable. ;RECOGNIZING ACCOUNTS RECEIVABLE;RECOGNIZING ACCOUNTS RECEIVABLE;Review;Review;Receivables are valued at the net amount expected to be received in cash Excludes amounts that the company estimates it will not be able to collect (net realizable value) Credit losses Recorded as Bad Debts Expense Considered a normal and necessary risk of doing business;Bad Debts Expense...;2 Methods for Accounting for Uncollectible Accounts;Direct Write-Off Method;Direct write-off method An entry is made for bad debts expense when an account is determined to be uncollectible at which time the loss is charged to Bad Debts Expense No matching of bad debts expense with the sales revenue Accounts receivable are reported at their gross amount on the balance sheet. Not acceptable for financial reporting purposes.;EFFECTS OF DIRECT WRITE-OFF METHOD; Allowance method Required when bad debts are deemed to be material in amount Uncollectible accounts are estimated At the end of each period Expense for the uncollectible accounts is Matched against sales in the same a