CHAPTER 4 – ACCOUNTS RECEIVABLES

Trade and Nontrade Receivables

Trade receivables – claims arising from sale of merchandise or services (accounts & notes receivables).

Nontrade receivables – claims arising from sources other than the sale of merchandise or services.

Classification

Trade Receivables – Realized in cash within the normal operating cycle / 1 year.

Nontrade Receivables

Gross Method – Rinerecord sales discount

Net Methos – Rinerecord sales discount forfeited

Allowance method – all written

Direct write off

CHAPTER 5 – Estimation of Doubtful Accounts