Receivables

Addition to interest income

The amortization of discount on notes receivable is __

Amortized cost using the effective interest method

Receivables, in general, are subsequently measured at

Allowance for doubtful accounts

affect the accounts receivable amount reported on the statement of financial position

Assigned accounts receivable balance less the bank loan balance

The assignor's equity in assigned accounts that is required to be disclosed in the notes to the financial statements is equal to the

Accounted for by segregating the assigned receivables from the other receivables through a journal entry

the appropriate treatment for receivable assignment transactions

Percentage of sales

may not be appropriate for estimating bad debts expense

An increase in allowance for doubtful accounts

Collections of accounts  receivable previously written off results in

Accounts receivable are factored without recourse

the factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables.

Normal journal entry when writing-off an account as uncollectible under the allowance method

Debit Allowance for Doubtful Accounts, credit Accounts Receivable

Receivables

A kind of financial assets that represent a contractual right to receive cash or another financial asset from another entity.

Trade receivables

It refers to claims arising from sale of merchandise or services in the ordinary course of business.

Accounts receivable

Example of trade receivables.

Direct write-off method

The method of accounting for bad debts not permitted under IFRS.

Aging of the accounts receivables

A method of estimating doubtful accounts which involves an analysis where the accounts are classified into not due or past due.

It is a claims supported by formal promises to pay usually in the form of notes.

Notes Receivable

Present value

Notes receivable shall be measured initially at

Loan receivable

Another financial asset arising from a loan granted by a bank or other financial institution to a  borrower.

Direct origination costs

Costs that should be included in the initial measurement of the loan receivable.

Cash

Under the direct write off method, which account is debited when the company writes off one of its accounts receivable?

Current liabilities

Credit balances in accounts receivables shall be classified as

Discounted value

Long-term notes receivables which normally bears interest or an interest which is unreasonably low shall be recognized initially at

Credit sales

A method of estimating bad debts that focuses on the income statement whether rather than the statement of financial position is the allowance method based on

Within one year or within normal operating cycle, whichever is higher

Receivables are classified as current assets if they are reasonably expected to be collected

Cash flows

relating to short-term receivables are NOT discounted because the effect of discounting is usually immaterial.

Short-term Receivables

the fair value is equal to the face amount or original invoice amount.

Gross Method

This is a method of recording credit sales wherein the accounts receivable and sales are recorded at gross amount of the invoice.

Direct write-off Method

This method requires recognition of bad debt loss only when the accounts proved to be worthless or uncollectible.

Allowance method

method of recording bad debt loss is consistent with accrual recording

Emphasizes measurement of bad debt expense

Estimation of uncollectible accounts receivable based on a percentage of sales

The excess of the face value over the present value

The interest on a non-interest bearing note is equal to

Included from total receivables with disclosure

If accounts receivable are pledged against borrowings, the amount of accounts receivable  pledged shall be

Negotiable promissory note

It is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at fixed determinable future time a sum certain in money to order or to bearer.

Remove the carrying value or amortized cost of the note receivable and any accrued interest earned prior to the transfer

When the note receivable is transferred (discounted) but requires derecognition, the entity making the transfer should