Accounting for Receivables
Different types of receivables:
- OTHER (GST RECOVERABLE, LOANS TO EMPLOYEES – NON-TRADE REC.
How to account for bad debts : 1. Direct write off 2.Estimate (allowance)
Which is more accurate? –Direct write off does not match expenses and rev.
How do we estimate? – percentage of sales, percentage of receivables
Discussion: the difference between notes and accounts receivable
Demonstration: How to calculate interest on a note