Cash Reconciliation and Accounts Receivable

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Cash Reconciliation and Accounts Receivable


Lecture number:
15
Pages:
3
Type:
Lecture Note
School:
Miami University, Oxford
Course:
Acc 221 - Intro to Financial Accounting
Edition:
1
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Lecture 15 Outline of Previous Lecture  Section 14: Review Cash Account  Cash Accounts o Uses  Bank Balance is Wrong o Deposits Outstanding o Check Outstanding  Company Balance is Wrong o Service Charges o Collection of a Note Outline of Current Lecture  Section 15: Cash Reconciliation and Accounts Receivable  Cash Reconciliation Wrap Up o Non-Sufficient Funds (NSF) Checks o Company Error in Accounting System  Accounts Receivable o Not Getting Paid o Direct Write-off Method o Allowance Method Current Lecture  Section 15: Cash Reconciliation and Accounts Receivable  Cash Reconciliation Wrap up o Non-Sufficient Funds (NSF) Checks  Occurs when a customer bounces a check written to the company.  When this occurs, we write down the check in the company accounting system and go to deposit the check. Once at the bank, the bank will record the entry being debited into your cash account and then immediately credited out, leaving a net 0 impact on the cash account.  This is because the bank cannot leave the money in your account, as the individual has not paid you.  We must reconcile our account to match the bank, so we take the money from the bounced check out of our cash account.  Dr. Accounts Receivable, Cr. Cash  We do not take the funds out of sales revenue because we have already completed the work, and still intend to get paid for that work. o Company error in accounting system ACC 221 1st Edition



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