百度作业网高分悬赏英文翻译!(5)
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高分悬赏英文翻译!(5)
Objective 5: Direct Write-Off Method of Accounting for Uncollectibles
The allowance method emphasizes reporting uncollectible accounts expense in the period in which the related sales occur. This emphasis on matching expenses with related revenue is the preferred method of accounting for uncollectible receivables.
There are situations, however, where it is impossible to estimate, with reasonable accuracy, the uncollectibles at the end of the period. Also, if a business sells most of its goods or services on a cash basis, the amount of its expense from uncollentible accounts is usually small. In such cases, the amount of receivables is also likely to represent a small part of the current assets. Examples of such a business are a restaurant, an attorney’s office, and a small retail store such as a hardware store. In such cases, the direct write-off method of recording uncollectible expense may be used.
Under the direct write-off method,uncollectible accounts expense is not recorded until an account has been determinted to be worthless. Thus, an allowance account and an adjusting entry are not needed at the end of the period. The entry to write off an account that has been determined to be uncollectible is as follows:
May 10 Uncollectible Accounts Expense 420
Accounts Receivable—D.L.Ross 420
To write off uncollectible account.
What if a customer later pays on an account that has been written off? If this happens, the account should be reinstated. The account is reinstated by reversing the earlier write-off entry. For example, assume that the account written off in the May 10 entry is collected in November of the same fiscal year. The entry to reinstate the account is as follows:
Nov. 21 Accounts Receivable—D.L.Ross 420
Uncollectible Accounts Expense 420
To reinstated account written off earlier in the year.
Cash received in payment of the reinstated amount is recorded in the usual manner. That is, Cash is debited and Accounts Receivable is credited for $420.
Objective 5: Direct Write-Off Method of Accounting for Uncollectibles
The allowance method emphasizes reporting uncollectible accounts expense in the period in which the related sales occur. This emphasis on matching expenses with related revenue is the preferred method of accounting for uncollectible receivables.
There are situations, however, where it is impossible to estimate, with reasonable accuracy, the uncollectibles at the end of the period. Also, if a business sells most of its goods or services on a cash basis, the amount of its expense from uncollentible accounts is usually small. In such cases, the amount of receivables is also likely to represent a small part of the current assets. Examples of such a business are a restaurant, an attorney’s office, and a small retail store such as a hardware store. In such cases, the direct write-off method of recording uncollectible expense may be used.
Under the direct write-off method,uncollectible accounts expense is not recorded until an account has been determinted to be worthless. Thus, an allowance account and an adjusting entry are not needed at the end of the period. The entry to write off an account that has been determined to be uncollectible is as follows:
May 10 Uncollectible Accounts Expense 420
Accounts Receivable—D.L.Ross 420
To write off uncollectible account.
What if a customer later pays on an account that has been written off? If this happens, the account should be reinstated. The account is reinstated by reversing the earlier write-off entry. For example, assume that the account written off in the May 10 entry is collected in November of the same fiscal year. The entry to reinstate the account is as follows:
Nov. 21 Accounts Receivable—D.L.Ross 420
Uncollectible Accounts Expense 420
To reinstated account written off earlier in the year.
Cash received in payment of the reinstated amount is recorded in the usual manner. That is, Cash is debited and Accounts Receivable is credited for $420.
可以用金山词霸．