1 / 10

CHAPTER 17

CHAPTER 17. Uncollectible Accounts. Total Sales on Account. ×. Percentage. =. Estimated Uncollectible Accounts Expense. ESTIMATING AND RECORDING UNCOLLECTIBLE ACCOUNTS EXPENSE. page 515. When you sell on account you take the risk that a customer will not pay.

tawannar
Download Presentation

CHAPTER 17

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CHAPTER 17 Uncollectible Accounts

  2. Total Saleson Account × Percentage = EstimatedUncollectibleAccounts Expense ESTIMATING AND RECORDING UNCOLLECTIBLE ACCOUNTS EXPENSE page 515 • When you sell on account you take the risk that a customer will not pay. • Uncollectible Accounts - Accounts receivable that cannot be collected. • This risk is a cost of doing business that should be recorded as an • in the same accounting period the revenue is earned. • We cannot predict which exact accounts will be uncollectible - if so, • we could credit each accounts receivable account. So we estimate. • Estimating accomplishes two objectives: $1,287,330.00 × 1.0% = $12,873.30

  3. 3 3 ANALYZING AND JOURNALIZING AN ADJUSTMENT FOR UNCOLLECTIBLE ACCOUNTS EXPENSE page 516 1 2 1. Enter and label credit amount. 2. Enter and label debit amount. 3. Record adjusting entry.

  4. 1 2 POSTING AN ADJUSTING ENTRY FOR UNCOLLECTIBLE ACCOUNTS EXPENSE page 517 1. Debit 2. Credit

  5. LESSON 17-2 Writing Off and Collecting Uncollectible Accounts Receivable

  6. 2 2 JOURNALIZING WRITING OFF AN UNCOLLECTIBLE ACCOUNT RECEIVABLE page 519 January 4. Wrote off Metro Food Court’s past-due account as uncollectible, $1,621.00. Memorandum No. 3. 1 1. Debit 2. Credit and customer’s name

  7. 2 3 1 POSTING AN ENTRY TO WRITE OFF AN UNCOLLECTIBLE ACCOUNT RECEIVABLE page 520 1. Post the debit amount to general ledger. 2. Post the credit amount to general ledger. 3. Post the credit amount to customer account. 4. Write Written off in the customer account. 4

  8. 1. Enter a debit to Accounts Receivable. Place a diagonal line in the Post. Ref. column. 1 1 REOPENING AN ACCOUNT PREVIOUSLY WRITTEN OFF page 521 January 30. Received cash in full payment of Metro Food Court’s account, previously written off as uncollectible, $1,621.00. Memorandum No. 5 and Receipt No. 12. 2 2. Enter a credit to Allowance for Uncollectible Accounts.

  9. RECORDING CASH RECEIVED FOR AN ACCOUNT PREVIOUSLY WRITTEN OFF page 522 January 30. Received cash in full payment of Metro Food Court’s account, previously written off as uncollectible, $1,621.00. Memorandum No. 5 and Receipt No. 12.

  10. 1 1 2 4 POSTING ENTRIES FOR COLLECTING A WRITTEN-OFF ACCOUNT RECEIVABLE page 523 1. Post the general journal entry to the general ledger. 2. Post the debit portion of the general journal entry to the customer account. 3. Write the words Reopen account in the Item column of the customer account. 4. Post the cash receipts journal entry to the customer account. 3

More Related