under the direct write-off method of accounting for uncollectible accounts This is a topic that many people are looking for. star-trek-voyager.net is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, star-trek-voyager.net would like to introduce to you Receivables: Direct Write-off Method for Accounting for Uncollectible Accounts – video. Following along are instructions in the video below:
“Is part 3 in our receivables and accounting from collectibles. Series. And we ll be be discussing the direct write off method for accounting for uncollectible accounts. So one thing make note of is that when using the direct write off method.
There will not be an allowance account as there was under the two allowance methods. We ve talked to in the prior part to this series under the direct write off method..
You actually wait until you determine that a specific customer will not be collected and then you write that customer off so let s look at bob wrestler who is an attorney in los angeles wrestler uses the direct write off method to account for uncollectible receivables at may 31st wrasslers account receivables. Total 14000 during june he earned revenue of 20000 on account and collected 19000. Thousand dollars on account he also wrote off uncollectible receivables of 2000 use the direct write off method to journalize wrestlers right off of the uncollectible receivables. So again.
We re actually writing off the uncollectible accounts that we ve deemed to be uncollectible just like the second entry. We were doing in our allowance account method so we debit the uncollectible accounting expense of 2000 and we credit the account receivables that we are actually writing off so it would be the account receivable subsidiary ledgers with the customer name attached and the second part of this question is what is wrasslers balance of accounts receivable at june 30th..
And then does he expect to collect all of this amount well we know our beginning accounts receivable is 14000 and we earned revenues on account of. 20000 and we ve collected 19000 up to this point but we just wrote off 2000 of our receivables. So that s the reduction to our counts receivables so our ending balance is 13000. And because we are using the direct write off method we only write off accounts that we do not anticipate collecting therefore rattler would expect to collect the 13000.
That is remaining in the accounts receivable account so similar to our on diagram that we had in the prior part under the allowance method. Let s say we made our sale november..
The 9th under the direct write off method. We would not make an adjustment at the end of the fiscal year. We would expense this when we determined a specific account to be uncollectible so in looking at this timeline. You should automatically see that this violates the matching principle.
We recorded the revenue and on november. The 9th of a particular year and we didn t expense the account that we didn t think we were going to collect until the next year..
So the matching principle has been violated here ” ..
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