Accounting Basics英语会计基础教学课件6.pptxVIP

Chapter 9Accounting for Receivables;Learning Objectives;TYPES OF RECEIVABLES;TYPES OF RECEIVABLES cont’d;Initial recognition and measurement of accounts receivable;Initial recognition and measurement of accounts receivable cont’d;PowerPoint presentation by Dr Anne Abraham, University of Western Sydney;Subsequent measurement of accounts receivable;Subsequent measurement ofaccounts receivable cont’d;Subsequent measurement ofaccounts receivable cont’d;1. Direct write-off method Bad debt losses are not anticipated and no allowance account is used No entries are made for bad debts until an account is determined to be uncollectable at which time the loss is charged to Bad Debts Expense Carrying amount of accounts receivable is reduced in statement of financial position;Subsequent measurement ofaccounts receivable cont’d;Subsequent measurement ofaccounts receivable cont’d;Subsequent measurement ofaccounts receivable cont’d;Recovery of an uncollectable account 2 journal entries;Question 2;Write-offs of accounts receivable $ 65 000 deemed uncollectable 2. Estimated impaired receivables 95 000 based on objective evidence 3. Recovery of impaired receivables 20 000 previously written off as uncollectable;Instructions: Prepare the journal entries to record each of the 3 transactions.;19;Assessing impairment;Assessing impairment cont’d;Assessing impairment cont’d;Assessing impairment cont’d;Question 3;Question 3 cont’d;2. Percentage of receivables Focuses on cash realisable value and reducing receivables by allowance Emphasis on statement of financial position relationships;2. Percentage of receivables Important: under this method, any existing balance (can be either Credit or Debit balance) in the allowance for impairment account is taken into consideration when determining the amount of the adjustment;Assume now that Friends Ltd uses the ageing of accounts receivable method. Again, at 31 Dec 2010 the balance of the Allowance for impairment account was $1,