Accounting for accounts receivables
[Explanations]
Learning objectives:
- Explain the gross method and net method of recording accounts receivable in the books of accounts. What entries are made under two methods?
- What is an uncollectible accounts expense?
- Explain the use of balance sheet approach and income statement approach for estimating uncollectible accounts expense for a certain period of time.
- Explain allowance method and direct write off method of recording uncollectible accounts expense of a business.
- How accounts receivable are converted into notes receivable? What are the benefits of converting accounts receivable into notes receivable?
- What is meant by “factoring accounts receivable”? What journal entries are made when accounts receivable are factored?
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