Lesson Plan 7.4 – Uncollectible Accounts
Course Title – Accounting I
Session Title – Uncollectible Accounts
Lesson Purpose – Demonstrate skill in calculating uncollectible accounts
expense, analyzing and journalizing entries related to uncollectible accounts.
Behavioral Objectives



Define terms related to uncollectible accounts.
Calculate uncollectible accounts expense.
Analyze and journalize entries related to uncollectible accounts.
Preparation
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
120.42.C
4.h. calculate bad debts expense and
journalize transactions involving
uncollected accounts.
7.a. follow oral and written
instructions;
7.b. develop time management skills
by setting priorities for completing
work as scheduled.
7.c. make decisions using
appropriate accounting concepts;
7.e. perform accounting procedures
using manual and automated
methods;
7.g. demonstrate use of the numeric
keypad by touch
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
130.166.C
7.g. – process uncollectible accounts
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the
mathematical processes and tools used in problem solving.
Materials, Equipment and Resources:


Textbook
Accounting Software
Lesson 7.4 – Uncollectible Accounts
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1


Journal Input Forms
Spreadsheet Software
Teaching Strategies:




Observation
Discussion
Demonstration
Verbal Drills
Lesson Content:
Demonstration and instruction on recording entries related to uncollectible
accounts.
Assessment:


Observation
Graded Assignments
Additional Resources:
Textbooks:
Guerrieri, Donald J., Haber, Hoyt, Turner. Glencoe Accounting RealWorld Applications and Connections. Glencoe McGraw-Hill, 2000.
ISBN/ISSN 0-02-815004-X.
Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 Accounting
Multicolumn Journal Anniversary Edition, 1st Year Course. SouthWestern Educational and Professional Publishing, 2003.
ISBN/ISSN: 0-538-43524-0
Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 General
Journal Accounting Anniversary Edition, 7th Edition. SouthWestern Educational and Professional Publishing, 2003.
ISBN/ISSN: 0-538-43529-1.
Websites:
Allowance for Uncollectible Accounts – Dictionary of Small Business.
Trautmann, Carl O, 1994-2009. http://www.small-businessdictionary.org/default.asp?term=ALLOWANCE+FOR+UNCOLLECT
IBLE+ACCOUNTS.
Estimating Uncollectible Accounts. Credit Research Foundation, 2009.
http://www.crfonline.org/orc/ca/ca-13.html.
Great Ideas – Uncollectible Accounts: Example Applying the Allowance
Method. Southwestern College Publishing, 2009.
http://www.swcollege.com/acct/car/gita/uncollectible_accounts_exa
mple.html
Business Partners:


Loan officers from a bank
Collection Agency officer
Lesson 7.4 – Uncollectible Accounts
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Lesson 7.4 – Uncollectible Accounts
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Activity 7.4.1 – Adjustments for Uncollectible
Accounts
Course Title – Accounting I
Session Title – Uncollectible Accounts
Activity Purpose – Demonstrate skill in analyzing and journalizing adjustments for
uncollectible accounts at the end of the fiscal period.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
120.42.C.4.c. determine and record
uncollected accounts receivable;
4.h. calculate bad debts expense and
journalize transactions involving
uncollected accounts.
7.a. follow oral and written instructions;
7.b. develop time management skills by
setting priorities for completing work as
scheduled;
7.c. make decisions using appropriate
accounting concepts;
7.e. perform accounting procedures
using manual and automated methods;
7.g. demonstrate use of the numeric
keypad by touch
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
130.166.C
3.e. – use T accounts;
7.g. – process uncollectible accounts
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the mathematical
processes and tools used in problem solving.
Materials, Equipment and Resources:


Textbook
Accounting Software
Teaching Strategies:


Observation
Verbal Drill
Activity 7.4.1 – Adjustments for Uncollectible Accounts
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Activity Outline:
1. Ask students to read about uncollectible accounts either from the textbook or
from a Web site you reference.
2. Discuss the risk of loss that occurs when a business sells on account.
Explain the need to make adjustments and the possible result if this is not
done.
3. Demonstrate the balance side and increase and decrease side of
Uncollectible Accounts Expense using a “T” account. Demonstrate the
contra asset Allowance for Uncollectible Accounts using a “T” account.
4. Explain how a business determines the amount to estimate for uncollectible
accounts.
5. Ask students to analyze this situation and answer questions verbally:
TK Phones, Inc. estimates their uncollectible accounts at the end of each
fiscal period. They use 2% of total sales. Total sales for the current fiscal
period were $27,596.00.
What is the amount of the adjustment?
What account is debited?
What account is credited?
If Accounts Receivable has a current balance of $22,500.00, what is the
book value of Accounts Receivable after the adjusting entry?
If this adjustment is not made, what is the effect on expenses for the
fiscal period?
If this adjustment is not made, what is the effect on assets for the fiscal
period?
What is the source document for this entry?
6. Have your students journalize the above adjusting entry using an input form.
Assessment:


Observation
Graded Assignment
Quality Feature
Participates in class discussion
Verbal question answers accurate
Journalized the adjusting entry accurately
Completes in a timely manner
Activity 7.4.1 – Adjustments for Uncollectible Accounts
Score
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Activity 7.4.2 – Collection Procedures
Course Title – Accounting I
Session Title – Uncollectible Accounts
Activity Purpose – Research collection procedures for businesses.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
 120.42.C.7.a. follow oral and written
instructions;
7.b. develop time management skills by
setting priorities for completing work as
scheduled;
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
130.166.C
N/A
TAKS Correlation:
READING
Objective 1: The student will demonstrate a basic understanding of culturally diverse
written texts.
WRITING
Objective 5: The student will produce a piece of writing that demonstrates a
command of the conventions of spelling, capitalization, punctuation, grammar, usage,
and sentence structure.
Objective 6: The student will demonstrate the ability to revise and proofread to
improve the clarity and effectiveness of a piece of writing.
Materials, Equipment and Resources:





Textbook
Internet
Guest Speaker
Poster Board
Markers
Teaching Strategies:


Observation
Discussion
Activity 7.4.2 – Collection Procedures
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Activity Outline:
1. Research this site: http://www.nrc.gov/reading-rm/doccollections/cfr/part015/. If the site is not available, locate another site by
searching the Internet. Take notes on steps used to collect on past due
accounts.
2. Invite a guest speaker who has knowledge about procedures in collecting on
past due accounts.
3. Have your students break into a team of 3 or 4 and create a poster outlining
their collection procedures for a business.
4. Ask the team to present their poster to the class.
Assessment:


Observation
Graded Assignment
Quality Feature
Appropriate behavior during guest speaker’s visit
Notes taken from the Web site were appropriate and useful in
providing procedures for debt collection
Participates as a team member in the team activity
Poster thorough, neat, and logical in sequence
Completes in a timely manner
Activity 7.4.2 – Collection Procedures
Score
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Activity 7.4.3 – Journalizing Uncollectible Account
Transactions
Course Title – Accounting I
Session Title – Uncollectible Accounts
Activity Purpose – Develop skill in analyzing and journalizing transactions in
writing off accounts or collecting from accounts that have been written off.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
120.42.C.
4.c. determine and record uncollected
accounts receivable;
4.h. calculate bad debts expense and
journalize transactions involving
uncollected accounts.
7.a. follow oral and written instructions;
7.b. develop time management skills by
setting priorities for completing work as
scheduled;
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
130.166.C
7.g. – process uncollectible accounts
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the mathematical
processes and tools used in problem solving.
Materials, Equipment and Resources:



Textbook
Input Forms
Multimedia Presentation Software
Teaching Strategies:



Observation
Demonstration
Verbal Drills
Activity 7.4.3 – Journalizing Uncollectible
Account Transactions
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Activity Outline:
1. Discuss the two transactions that can occur in uncollectible accounts other
than the adjusting entry:
a. Writing off an account when it becomes a known bad debt.
b. Collecting on an account that was written off.
2. Demonstrate the analysis of Writing off an Account by using “T” accounts
and an Uncollectible Accounts presentation.
3. Have students journalize the example in an input form.
Assessment:


Observation
Graded Assignment
Quality Feature
Student participates in class discussion
Verbal drills answers accurate
Journal entry in the input form accurate
Completes in a timely manner
Activity 7.4.3 – Journalizing Uncollectible
Account Transactions
Score
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1