Allowance and Notes Recievable

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Allowance and Notes Recievable

Lecture number:
Lecture Note
Miami University, Oxford
Acc 221 - Intro to Financial Accounting
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Lecture 16 Outline of Previous 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 Outline of Current Lecture  Section 16: Allowance and Notes Receivable  Cash Allowance o Write-off entries o Adjusting Entries o System o Reinstating an account  Adjusting Entries o Accounts Receivable o Adjusting Allowance Account  Note Receivable o Legally Binding Contracts Current Lecture  Section 16: Allowance and Notes Receivable  Allowance o Write off entry  Know the individual and amount of money that they owe  Dr. Allowance, Cr. Accounts receivable  May only include accounts receivable if you know both the individual and specific amount, because you have to adjust the sub ledger o Adjusting entry  This occurs before the financial statements at the end of the accounting period  Must calculate an estimate of how much money is not paid  Dr. Bad Debt Expense, Cr. Allowance o System  Most individuals buying on credit will end up paying ACC 221 1st Edition

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