Reporting and Analyzing Receivables
Journal Entries for Accounts Receivables
Type of Entry
Journal Entry
Direct write-off method-to record
write off of an account. Not GAAP
approved.
Bad Debts Expense
Accounts Receivable
XXX
XXX
To record estimated uncollectibles
accounts at the beginning of each
year.
Bad Debts Expense
Allowance for Doubtful Accounts
XXX
XXX
To record the write-off of an
uncollectible account using the
allowance method for accounting for
receivables.
Allowance for Doubtful Accounts
XXX
Accounts Receivable-customers name
XXX
To record the recovery of an
uncollectible account that has
already be written off earlier in the
accounting period.
Accounts Receivable-customers name
Allowance for Doubtful Accounts
XXX
XXX
Cash
XXX
Accounts Receivable-customers name
XXX
1
Reporting and Analyzing Receivables
Journal Entries for Notes Receivables
Type of Entries
Journal Entry
To record the making of a notes
receivable for sale of
merchandise
Notes Receivable
Sales Revenue
To record the making of a notes
receivable in exchange of an
accounts receivable
Notes Receivable
XXX
Accounts Receivable-customers name
XXX
To record the honoring
(payment) of a notes receivable
at the date of maturity when no
interest has been accrued
Cash
Notes Receivable
Interest Revenue
XXX
XXX
XXX
Cash
Notes Receivable
Interest Receivable
Interest Revenue
XXX
To record the accrual of interest
on a notes receivable before the
maturity date and at the end of a
fiscal period
Interest Receivable
Interest Revenue
XXX
To record the dishonoring (nonpayment) of a notes receivable
when it is possible that the
customer will be able to pay at a
future date
Accounts Receivable
Notes Receivable
Interest Receivable
XXX
To record the honoring
(payment) of a notes receivable
at the date of maturity when
interest has been accrued
2
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
Reporting and Analyzing Receivables
Journal Entries for Notes Receivables
Type of Entries
To record the dishonoring (nonpayment) of a notes receivable
when there is no hope of future
collection.
Journal Entry
Allowance of Doubtful accounts
Notes Receivable
Interest Receivable
XXX
XXX
XXX
Journal Entries for Credit Card Sales and Factoring of Receivables
Type of Entries
Journal Entry
To record sale of merchandise on
credit using national credit cards
such as Visa or Mastercard
Cash
Service Charge Expense
Sales Revenue
XXX
XXX
XXX
To record the sale of Receivables
to a factor to provide a quick return
of cash to the company
Cash
Service Charge Expense
Accounts Receivable
XXX
XXX
3
XXX