Receivables & The Allowance vs The Direct Write Off Methods
Requirements
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Basic understanding of accounting principles and concepts: Students should have knowledge of fundamental accounting concepts such as debits and credits, the accounting equation, and the basic financial statements.
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Familiarity with financial statements and the accounting equation: Students should be able to analyze financial statements, understand their components (such as assets, liabilities, and equity), and grasp how transactions affect the accounting equation.
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Proficiency in mathematical calculations: Students should be comfortable performing mathematical calculations, including addition, subtraction, multiplication, and division. Basic knowledge of percentages and ratios is also beneficial.
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Knowledge of journal entries and posting: Students should understand the concept of journal entries and how to record them in the appropriate accounts. Knowledge of the chart of accounts and the posting process is essential.
Description
Welcome to our comprehensive course on Accounts Receivable and Notes Receivable in accounting. In this course, we will explore the fundamental concepts and practical applications of managing receivables, including accounts receivable and notes receivable.
We will begin by examining the characteristics of accounts receivable and notes receivable, understanding their role in financial transactions. The accounts receivable cycle will be thoroughly covered, including the journal entries for recording accounts receivable and the use of subsidiary ledgers to track individual customer balances.
A major focus of the course will be on the valuation of accounts receivable. We will delve into two commonly used methods: the allowance method and the direct write-off method. You will gain a comprehensive understanding of these methods and learn how they impact financial statements. We will explore the estimation of bad debt expense under the allowance method, emphasizing the importance of accurate valuation.
Who this course is for:
- Aspiring Accountants: Individuals who are pursuing a career in accounting or finance and want to develop a strong understanding of accounting concepts and techniques.
