Term
Accounts Receivable
Service Revenue |
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Definition
Record the transaction:
Provide Services on account |
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Term
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Definition
| A reduction, NOT in the selling price of a product or service, but in the amount to be paid by a credit customer if payment is made within a specific period of time |
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Term
Cash 392
Sales Discount 8
Accounts Receivable 400 |
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Definition
Record the transaction:
A customer pays for teeth whitening ($400) and takes advantage of the terms 2/20, n/30. |
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Term
| Service Revenues - Sales Discounts = Net Revenues |
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Definition
| Equation for Net Revenues? |
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Term
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Definition
| Seller reduces the customer's balance owed or provides a partial refund because of some defect in the product/service |
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Term
Sales discount 50
Accounts Receivable 50 |
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Definition
Record the treansaction:
After getting her teeth whitened, Dee notices another local dentist is offering the same procedure for $350, which is $50 less than what she paid. So her dentist is giving her a $50 refund. |
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Term
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Definition
| The amount of cash the firm expects to collect |
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Term
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Definition
| Recording an adjustment at the end of each period to allow for the possibility of future uncollectable accounts. the adjustment has the effects of reducing assets and increasing expenses. |
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Term
Bad Debt Expense 6
Allowance for U. A. 6 |
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Definition
Record the adjustment:
Angela bills customers $50 million for services provided. By the end of the year $20 million remains uncollected. In previous years 30% of acc. rec. were not collected. |
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Term
| Accounts Receivable - Allow. U. A. = Net Accounts Receivable |
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Definition
Equation for Net Accounts Receivable?
(In balance sheet) |
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Term
Allowance for U. A. 4000
Accounts Receivable 4000 |
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Definition
Record the transaction:
Write off a customer's account for $4000 |
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Term
2 TRANSACTIONS
Accounts Receivable 4000
Allowance for U. A.
Cash 4000
Accounts Receivable 4000 |
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Definition
Record transaction:
After Angela wrote off the customer's account for $4000, the customer paid the full amount. |
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Term
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Definition
| Using a higher percentage for "old" accounts than for "new" accounts when estimating uncollectable accounts |
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Term
Cash 10,600
Notes Receivable 10,000
Interest Revenue 600 |
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Definition
Record the transaction:
The collection of a notes receivable for 6 months with 12% interest. |
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Term
Note Receivable
Service Revenue |
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Definition
Record the transaction:
Instead of paying on account the customers sign a note. |
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Term
Interest Receivable
Interest Revenue |
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Definition
Record the adjustment:
The adjustment to accrue interest revenue |
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Term
| Receivable turnover ratio |
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Definition
| Show the number of times during a year that the average accounts receivable balance is collected |
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Term
| Net Credit Sales/Average accounts rec. |
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Definition
| Receivable turnover ratio equals? |
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Term
| 365 days/Receivables turnover ratio |
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Definition
| Average collection period equals? |
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