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- Subject
- Accounting
This document discusses how to record the disposition of accounts receivables. It explains the function of these entries and provides examples from companies like Walmart and AT&T. It is useful for understanding how to manage accounts receivables in accounting.
What's inside
- Description of accounts receivables disposition entries
- Function of these entries
- Example from Walmart
- Example from AT&T
- Impact on cash flow
- Recording the disposition of accounts receivables
Who it is for: Students taking an accounting course with code ACC 291. (Undergraduate)
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Summary
Accounts receivables are amounts owed to a company by customers. Students learn how to record the sale of these receivables to other companies. The guide explains the accounting entries used and their purpose.
Recording the sale
The sale of accounts receivables to a factor is recorded with specific accounting entries. These entries include the cash received and any service charge. The company balances their receivables account.
Credit card transactions
Credit card transactions are recorded similarly to the sale of accounts receivables. The cash received and service charge are detailed. The sales account is then balanced.
Company examples
Walmart's net receivables are discussed. AT&T's accounts receivable are examined. The guide looks at how these companies handle their receivables.
Key terms
- Accounts receivables
- Money owed to a company by customers.
- Disposition of accounts receivables
- The sale of accounts receivables to another company.
- Factor
- A company that specializes in handling accounts receivables.
- Service charge
- A fee paid to the factor for handling accounts receivables.
- Credit card transactions
- Sales made using credit cards.
- Annual report
- A company's yearly financial report.
Questions this document helps with
- What entries record the sale of accounts receivables?
- How are credit card transactions recorded?
- Why might a company sell its accounts receivables?
Summary written with AI from the document's text.
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