Receivables and Payables

Learning objectives

After studying this chapter, you should be able to:

• Account for uncollectible accounts receivable under the allowance method.

• Record credit card sales and collections.

• Define liabilities, current liabilities, and long-term liabilities.

• Define and account for clearly determinable, estimated, and contingent liabilities.

• Account for notes receivable and payable, including calculation of interest.

• Account for borrowing money using an interest-bearing note versus a non interest-bearing note.

• Analyze and use the financial results - accounts receivable turnover and the number of days' sales in accounts receivable.