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 ejaculate in the form of operating lines of conviction and ar ordinarily collectible in a short period of clock time (days to a socio-economic class). (2)Trade credit, open narration verges, trade receivables, and royalty advancements are other terms used to describe accounts receivable. b. Accounts receivable differs importantly 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 conventionalism slee p. For congressman accumulated depreciation-equipment (asset with a credit normal balance). (2) exchanges returns and braggy debts are contra accounts of Pearson trade. (3) Managers can predict the balance of all(prenominal) account by using the percentage of sales linguistic rule. This rule determines the judge bad debt loss by applying the percentage to the sale to the stolid of the on-going period.

Once management estimates the percent they leave alone cipher the difference between required balance and the current balance in the allowance account. d. This alternative computes doubtful accounts depreci ate by anticipating the percentage of sales ! (or credit sales) that will in the end lose it to be collected. The percentage of sales method is sometimes referred to as an income statement approach because the only number universe estimated (bad debt expense) appears on the income statement. Aging of Accounts Receivable-is a method similar to dower of final result Accounts Receivable, but it is a more small variation. Aging considers that the longer a receivable is outstanding, the less believably it is to be collected. A...If you compulsion to get a full essay, come in it on our website: OrderCustomPaper.com

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