Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 4, Problem 2FSA
1.
To determine
Explain the condition that a company would be allowed to omit the account from balance sheet and describe if it makes sense for F Incorporation.
2.
To determine
Explain the reason for sales reflection on the financial statement.
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Students have asked these similar questions
1. When using the Allowance method to account for uncollectible accounts, between the income statement approach and the balance sheet approach, which is more accurate in your opinion? Fully support your answer with sound research. 2. Can the Allowance account be used to misinterpret a company's financial results? How so? Provide at least one example of how a company might accomplish this. 3. Suppose a company accepts a Note Receivable in lieu of an Accounts Receivable. How would the company record this transaction? Provide an example and related journal entry. (You may not use the examples from the textbook.)
Which of the following is not a reason for the Jones Hardware Store to accept credit cards from customers?
Group of answer choices
A)Jones can receive its money faster than if it directly extended credit to the customer by an account receivable.
b)The credit card company offers a discount to Jones so that Jones will have more money available for operations.
C)Jones will not have to be concerned with nonsufficient funds checks from customers.
d)Jones will not have to have extra office workers to make phone calls to customers requesting collections on accounts.
E)All these are reasons to accept credit cards.
a. At the stage of recording a credit sale transaction, please state the potential misstatements
3) Accounts receivable collection period
can occur! Give examples of control risk corsiderations in credit sales transactions!
4) Uncollectible accounts receivable expense against net credit sales
b. According to information taken from the accounting records of the manufacturing company PT.
5) Uncollectible Accounts Receivable Fee against the write-off of accounts receivable
Hozutama
b. In your opinion what are the implications of the ratio results for auditors in the audit strategy
is as follows :
done in year 5
Sth Year
4th Year
3rd Year
2nd Year
1st Year
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Business
Opportunities
(Gross)
Allowance for (14,150)
IDR 535,000
IDR 295,000
IDR 265,000
IDR207,500
IDR175,000
(6,400)
(5,275)
(5,900)
(5,400)
Losses on
Accounts
Total Assets
2,200,000
2,700,000
1,800,000
2,050,000
1,500,000
1,750,000
1,200,000
1,400,000
1,000,000
1,200,000
Total Sales…
Chapter 4 Solutions
Financial Accounting
Ch. 4 - Prob. 1YTCh. 4 - Prob. 2YTCh. 4 - Suppose at the end of the year Pendleton Corp.s...Ch. 4 - Prob. 4YTCh. 4 - Prob. 5YTCh. 4 - Prob. 6YTCh. 4 - Prob. 7YTCh. 4 - Prob. 1QCh. 4 - Prob. 2QCh. 4 - Prob. 3Q
Ch. 4 - Prob. 4QCh. 4 - What does true cash balance refer to?Ch. 4 - Identify and explain the financial statements on...Ch. 4 - Describe how accounts receivable arise. What does...Ch. 4 - Prob. 8QCh. 4 - Define net realizable value, book value, and...Ch. 4 - Explain the difference between the direct...Ch. 4 - If a company uses the allowance method of...Ch. 4 - Describe the two allowance methods used to...Ch. 4 - Which method of calculating the allowance for...Ch. 4 - Which method of calculating the allowance for...Ch. 4 - What are the advantages and disadvantages of...Ch. 4 - What is the difference between accounts receivable...Ch. 4 - What is the formula to calculate the accounts...Ch. 4 - How does a firm use its accounts receivable...Ch. 4 - Prob. 19QCh. 4 - Prob. 20QCh. 4 - Prob. 1MCQCh. 4 - Prob. 2MCQCh. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 6MCQCh. 4 - Prob. 7MCQCh. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - Prob. 1SEACh. 4 - Prob. 2SEACh. 4 - Prob. 3SEACh. 4 - Prob. 4SEACh. 4 - Prob. 5SEACh. 4 - Prob. 6SEACh. 4 - Prob. 7SEACh. 4 - Prob. 8SEACh. 4 - Prob. 9SEACh. 4 - Prob. 10SEBCh. 4 - Prob. 11SEBCh. 4 - Prob. 12SEBCh. 4 - Prob. 13SEBCh. 4 - Prob. 14SEBCh. 4 - Prob. 15SEBCh. 4 - Prob. 16SEBCh. 4 - Prob. 17SEBCh. 4 - Prob. 18SEBCh. 4 - Prob. 19EACh. 4 - Prob. 20EACh. 4 - Prob. 21EACh. 4 - Prob. 22EACh. 4 - Prob. 23EACh. 4 - Prob. 24EACh. 4 - Prob. 25EACh. 4 - Prob. 26EACh. 4 - Prob. 27EACh. 4 - Prob. 28EACh. 4 - Prob. 29EACh. 4 - Prob. 30EACh. 4 - Prob. 31EACh. 4 - Prob. 32EBCh. 4 - Prob. 33EBCh. 4 - Prob. 34EBCh. 4 - Prob. 35EBCh. 4 - Prob. 36EBCh. 4 - Prob. 37EBCh. 4 - Prob. 38EBCh. 4 - Prob. 39EBCh. 4 - Prob. 40EBCh. 4 - Prob. 41EBCh. 4 - Prob. 42EBCh. 4 - Prob. 43EBCh. 4 - Prob. 44EBCh. 4 - Prob. 45PACh. 4 - Prob. 46PACh. 4 - Prob. 47PACh. 4 - Prob. 48PACh. 4 - Prob. 49PACh. 4 - Prob. 50PACh. 4 - Prob. 51PACh. 4 - Prob. 52PACh. 4 - Prob. 53PBCh. 4 - Prob. 54PBCh. 4 - Prob. 55PBCh. 4 - Prob. 56PBCh. 4 - Prob. 57PBCh. 4 - Prob. 58PBCh. 4 - Prob. 59PBCh. 4 - Prob. 60PBCh. 4 - Prob. 1FSACh. 4 - Prob. 2FSACh. 4 - The following information has been adapted from...Ch. 4 - Prob. 1CTPCh. 4 - Prob. 2CTPCh. 4 - The information given here was taken from Yahoo!...Ch. 4 - Prob. 1IECh. 4 - Prob. 2IECh. 4 - The information given here was taken from Yahoo!...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which of the following statements is FALSE? An entry to write off an uncollectible account does not change the net realizable value of AR. Recording bad debt expense will affect total assets. The maturity value of a note is it’s principal plus interest. A credit memo will reduce a company's cash balance. If a company's accounts receivable are a material amount, the company must use the allowance method. A. В. С. D. Е.arrow_forwardQuestion 1: Why do we need to estimate doubtful accounts?Question 2: Which is better to have? Accounts receivable or notes receivable? And why?Question 3: What happens if companies use the direct write-off method in accounting for bad debts? What will be the effect in the financial statements? Question 4: What is the relationship of the promissory note between the maker and the payee?arrow_forwardWhy should a company have clear strategy for collecting Accounts receivable from its customers? For example, some companies do offer discounts to customer for early payment instead collecting the full amount at the due date.arrow_forward
- Write the word "True" if the statement is correct and "False" if it is incorrect. 1. Debit memos are items added by the bank but have not been added by the book as of the cut-off date. 2. Credit memos are items that have been deducted by the bank but have not been deducted per book. 3. Debit memos are collections from receivables by the bank on behalf of the company and proceeds from loans directly added by the bank to the account of the depositor. 4. One of the internal control features in every company is a monthly bank reconciliation in which it is created to report that there is no discrepancy between the cash balance per book records and the cash balance per bank records. 5. After all, adjustments have been made. Reciprocal accounts should have the same balance. 6. Bank reconciliation statement is prepared to reconcile the difference between cash book and bank balance. 7. When a company has two bank account, only one bank reconciliation is prepared for all the accounts. 8. The…arrow_forward"In accounts receivable management, credit analysis is the process of determining the probability that customers will not pay."arrow_forwardPromissory notes are not used in one of the following situation a. When the business borrows money b. When the business make sales c. When the period of credit exceed the normal limits d. When the business makes settlement of accounts receivablesarrow_forward
- What is the primary reason why most businesses want to sell on a credit basis if it is preferable for sellers to collect advance payments from customers and/or accept cash transactions only? Give and explain a credit/collection-related task of (a) credit manager and (b) collections manager.arrow_forward4. Consider the following two statements (1) Businesses should deny credit to customer to eliminate the costs of collecting trade receivables. (2) Trade receivable factoring could provide immediate funds to businesses after credit sales. Which one of the following combinations relating to the above statements is correct? A (1) True (2) False B (1) True (2) True C (1) False (2) True D (1) False (2) Falsearrow_forwardA company seeking a line of credit at a bank was turned down. Among other things, the bank stated that the company’s 2 to 1 current ratio was not adequate. Give reasons why a 2 to 1 current ratio might not be adequate.arrow_forward
- The following information is relevant to the calculation of the sales figure for Alpha, a sole trader who does not keep proper accounting records: $ Opening accounts receivable 29,100 Cash received from credit customers and paid into the bank 381,600 Expenses paid out of cash received from credit customers before banking 6,800 Irrecoverable debts written off 7,200 Refunds to credit customers 2,100 Discounts allowed to credit customers 9,400 Cash sales 112,900 Closing accounts receivable 38,600 Which of the following should appear in Alpha's trading account for sales? A $525,300 B $511,700 C $529,500 D $510,900arrow_forwardA friend owns a business that extends credit to its customers. The friend has asked you to helps with estimating uncollectible accounts and wants you to make a recommendation. Specifically, your friend is asking: Which of the two methods of estimating uncollectible provides for the most accurate estimate of the current net realizable value of the receivables?arrow_forwardWhy does Target not report any accounts receivable, even though they have a Target brand credit card?arrow_forward
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