Flashcards in Section 10 - Receivables Deck (10):
What value should A/R be reported at?
Gross amount of A/R less estimates of amount that won't be collected.
What are the three methods of calculating bad debt expense?
1) Direct write-off method
2) Income Statement Approach - % of credit sales method
3) Balance Sheet Approach - % of receivable method
Is the Direct Write-off Method for bad debt allowed under GAAP?
NO, this method is only for tax purposes because it is not MATCHING and not CONSERVATIVE
GAAP two methods are the valuation approach which are:
1) Income Statement Approach - % of credit sales method
2) Balance Sheet Approach - % of receivable method
Under the I/S approach - % of credit sales method, what principle is emphasize?
Matching principle - record expense at point of sale
Under the B/S approach - % of receivable method, what principle is emphasize?
Asset valuation - age all the outstanding A/Rs
What are the J/Es to record bad debt expense, write-off A/R and recover A/R?
To record bad debt expense
Bad Debt Expense
Allowance for uncollectible accounts**
*** Contra account on the B/S
To write off A/R
To recover A/R (someone paid A/R that was written down) - 2 J/Es
Is pledging and assigning receivable as collateral borrowing or selling?
Transaction costs attributable to acquisition of receivable is allowed under IFRS or GAAP?
IFRS uses which word for "allowance method"?