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.