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Describe the common classes of receivables,& Describe the accounting for uncollectible receivables.

Describe the common classes of receivables,& Describe the accounting for uncollectible receivables.

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Expert Solution

Common classes of receivables :

1) Account receivables= account receivables is mainly related to business. It is money owned to you that you have not received from your customers and they are normally expected to be collected within 30 or 60 days

2) Notes receivables = It is like account receivable but payment deadline are pre determined. These are amount that customer owe for which a formal, written instrument has been issued.

3) Trade receivables= trade receivables applies whenever a sale of a product or services is made to the customer. The only difference is that it is a direct result of sale made by you.

4) other receivables

Accounting for uncollectible receivables:

There are two methods:

1) direct write off method= this method record bad debt when A/R are determined to be uncollectible or worthless.

2) allowance method = this method record bad debt by estimating uncollectible account at the end of the accounting period.

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ekkarill92 answered 2 years ago
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