Unit 2: accounting for receivables introduction

UNIT 2:


ACCOUNTING FOR RECEIVABLES


Introduction

This unit focuses on accounts receivable, and notes receivables. We describe each of these assets, their use in practice and how they are accounted for, and reported in financial statements.

The content of this unit are summarized in to two sections. Sections one discuss accounting for accounts receivable. Section two explains accounting for notes receivable.

Objectives:

After completing the study of this unit, you will be able to:

• 
  Explain how accounts receivable are recognized in the accounts.
  
• 
  Distinguished between the methods and bases used to value accounts receivable.
  
• 
  Compute the maturity date and interest, on notes receivable.
  
• 
  Explain how notes receivable are recognized in the accounts.
  
• 
  Discuss how notes receivable are valued.
  
• 
  Describe the entries to record the disposition of notes received.
  

Section 1:


Accounting for Accounts Receivable


Objectives:

After studying this section, you will be able to:

• 
  Explain how recognizing accounts receivable.
  
• 
  Describe how accounts receivable are value.
  
• 
  Apply the allowance and direct write-off methods to account for accounts receivable.
  
• 
  Estimate uncollectible using methods based on sales and accounts receivable.
  

Outline of this Section 1.1 Definition 1.2 Recognizing Accounts Receivable 1.3 Valuing Accounts Receivable 1.4 Methods of Accounting for Bad Debts 1.3.1 Allowance Method 1.3.2 Direct Write-Off Method