CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 7-1 Direct Write-Off Method of Recording Uncollectible Accounts Uncollectible accounts.

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Allowance Method of Recording Uncollectible Accounts Expense

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LESSON 7-1 Direct Write-Off Method of Recording Uncollectible Accounts

Presentation transcript:

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 7-1 Direct Write-Off Method of Recording Uncollectible Accounts Uncollectible accounts Direct write-off method

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Chapter 7 Objectives Accounting for Uncollectible Accounts After studying Chapter 7, you will be able to: Define accounting terms related to uncollectible accounts. Identify accounting concepts and practices related to uncollectible accounts. Calculate and record estimated uncollectible accounts expense using the direct write-off method. Calculate and record estimated uncollectible accounts expense using the allowance method. Calculate and analyze accounts receivable turnover ratios. 2 LESSON 7-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 7-1 uncollectible accounts: accounts receivable that cannot be collected writing off an account: canceling the balance of a customer account because the customer is not expected to pay direct write-off method of recording losses from uncollectible accounts: recording uncollectible accounts expense only when an amount is actually known to be uncollectible 3 LESSON 7-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 7-1 RECORDING UNCOLLECTIBLE ACCOUNTS EXPENSE November 15. Wrote off James Nordquist’s past due account as uncollectible, $ Memorandum No. 21. page 201

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON Make an entry to reopen the account. 2.Make an entry to record the cash receipt. COLLECTING A WRITTEN-OFF ACCOUNT— DIRECT METHOD page January 21. Received cash in full payment of James Nordquist’s account, previously written off as uncollectible, $ Memorandum No. 54 and Receipt No. 49.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 7-1 DEFINE TERMS REVIEW In Quizlet uncollectible accounts writing off an account direct write-off method of recording losses from uncollectible accounts page 203 Create: Chapter 7 AdvAcc (then SAVE)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Exit Ticket for today: Audit Your Understanding Why should the amount of an uncollectible account be removed from the assets of a business? 2.In the direct write-off method, how is an uncollectible account closed? 3.Why is the customer account reopened when cash is received for an account previously written off as uncollectible? 7 LESSON 7-1 In a Word Document, SaveAS: Chapter7-1AYUYourName And drop in my Inbox today!

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Complete the following assignments for Chapter 7-1 today Define Terms Review on page 201. Answer Audit Your Understanding questions on page 201. Complete Work Together 7-1 on Aplia – page 201. Complete On Your Own 7-1 on Aplia – page 201. Complete Application Problem 7-1 on Aplia – page LESSON 7-1