Pearson Pic

Pearson Pic Study a. Accounts due is money owed by customers (individuals or corporations) to an a nonher(prenominal)(prenominal) entity in exchange for unpaid goods or proceedss. Receivables bring forth in the form of operating lines of point of reference and atomic number 18 prevalently collectible in a short period of sentence (days to a social class). (2)Trade credit, open narration full terms, trade receivables, and royalty advancements are other terms used to describe accounts receivable. b. Accounts receivable differs significantly from notes receivable in many ways. Accounts receivable generally do not accrue interest. Accounts receivable is considered a short term debt that is ordinarily paid within 12 months and occurs after receiving a service or product. Notes receivable is an extended line of credit and is usually owed for a period chronic than a year and typically accrues interest. c. A contra account is a subaccount with the opposite normal sleep. For congressman accumulated depreciation-equipment (asset with a credit normal balance). (2) cut-rate sales returns and braggy debts are contra accounts of Pearson trade. (3) Managers can predict the balance of from each one account by using the percentage of sales hulk. This rule determines the judge bad debt loss by applying the percentage to the sale to the stolid of the underway period.

Once management estimates the percent they allow for cipher the difference between required balance and the current balance in the allowance account. d. This alternative computes doubtful accoun ts outlay by anticipating the percentage of! sales (or credit sales) that will last lose it to be collected. The percentage of sales method is sometimes referred to as an income statement approach because the only number creation estimated (bad debt expense) appears on the income statement. Aging of Accounts Receivable-is a method similar to constituent of final result Accounts Receivable, but it is a more accurate variation. Aging considers that the longer a receivable is outstanding, the less presumable it is to be collected. A...If you compulsion to get a full essay, ordain it on our website: BestEssayCheap.com

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