Chapter 8 Accounting for Receivables

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Learning Objectives

After studying this chapter, you should be able to:

  1. Identify the different types of receivables.
  2. Explain how companies recognize accounts receivable.
  3. Distinguish between the methods and bases companies use to value accounts receivable.
  4. Describe the entries to record the disposition of accounts receivable.
  5. Compute the maturity date of and interest on notes receivable.
  6. Explain how companies recognize notes receivable.
  7. Describe how companies value notes receivable.
  8. Describe the entries to record the disposition of notes receivable.
  9. Explain the statement presentation and analysis of receivables.

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Feature Story

A Dose of Careful Management Keeps Receivables Healthy

“Sometimes you have to know when to be very tough, and sometimes you can give them a bit of a break,” says Vivi Su. She's not talking about her children, but about the customers of a subsidiary of pharmaceutical company Whitehall-Robins, where she works as supervisor of credit and collections.

For example, while the company's regular terms are 1/15, n/30 (1% discount if paid within 15 days), a customer might ask for and receive a few days of grace and still get the ...

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