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Receivables and Payables
Read and take notes on sections 9.1-9.9 on pages 11-54.
This chapter discusses accounts receivable, uncollectible accounts, bad debts, and accounts payable.
Section 9.3 covers what should happen when a receivable is uncollectible. Pay attention to aging schedules, how to write off receivables, and how credit card transactions should be identified and recorded from the business entity's perspective.
Section 9.4 discusses liabilities and explains the difference between clearly-determined liabilities, estimated liabilities, and contingent liabilities.
Section 9.5 discusses promissory notes and how to account for them. Pay attention to interest receivable, interest revenue, interest expense, and interest payable.
Section 9.6 describes how businesses handle short-term cash flow problems when they need short-term financial assistance to support strategic business activity.
Section 9.9 offers a self-test. The solution to the self-test is on pages 66 and 67.