Transaction Analysis and Journal Entry Help
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| Account Coding Structure | Account is a five-digit number. 1st (left-most) digit is Financial Statement Classification 1 Asset 2 Liability 3 Equity 6 Revenue 7 Purchases 8 Expense 5th (right-most) digit is 0 for Normal Accounts. For Contra Accounts this digit is not 0 (usually 9). |
| Accrual of Expenses | Increase: Expense Increase: Liability >Example: Accrue interest expense of 500 Transaction Analysis Format: Interest Expense 500 Interest Payable 500 Debit Credit Format: Debit..Interest Expense 500 Credit..Interest Payable 500 Other typical accrued expenses: ..Wages; (wages payable) ..Taxes; (taxes payable) |
| Accrual of Revenues | Increase: Revenue Increase: Receivables >Example: Accrue interest revenue of 500 Transaction Analysis Format: Interest Revenue 500 Interest Receivable 500 Debit Credit Format: Debit..Interest Receivable 500 Credit..Interest Revenue 500 |
| Bad Debt Expense, Allowance Method | Procedure: 1st: Determine the amount necessary to adjust the existing balance of the Allowance for Bad Accounts to the desired ending balance. 2nd: Use this amount in the journal entry: Increase: Bad Debt Expense Increase: Allowance for Bad Accounts Transaction Analysis Format: Bad Debt Expense 1000 Allowance for Bad Accounts -1000 --> Allowance for Bad Accounts is a contra asset account and thus increased by a negative number Debit Credit Format: Debit..Bad Debt Expense 1000 Credit..Allowance for Bad Accounts 1000 |
| Bank Reconciliation, journal entries | Journal entries are made to record adjustments to Cash to account for transactions that are evidenced by the bank statement. Example: bank service charge of 80 Transaction Analysis Format: Miscellaneous Expense 80 Cash -80 Debit Credit Format: Debit..Miscellaneous Expense 80 Credit..Cash 80 |
| Common Stock, issuance of par value shares | Increase: Cash Increase: Common Stock for par value of shares Increase: Paid-in Capital to balance >Example: issue 100 shares with $5 par value for $8 per share Transaction Analysis Format: Cash 800 Common Stock 500 Paid-in Capital 300 Debit Credit Format: Debit..Cash 800 Credit..Common Stock 500 Credit..Paid-in Capital 300 |
| Depreciation, Journal Entry | Increase: Depreciation Expense Increase: Accumulated Depreciation Transaction Analysis Format: Depreciation Expense 1000 Accumulated Depreciation -1000 --> Accumulated Depreciation is a contra asset account and thus increased by a negative number Debit Credit Format: Debit Depreciation Expense 1000 Credit Accumulated Depreciation 1000 |
| Depreciation, SYD | Sum-of-the-Years Digits (SYD) depreciation is computed as the Depreciable Cost of an asset times a SYD factor that is computed from the asset's useful life. Depreciable Cost is the asset's Cost less Salvage value. Residual value is a synonym for Salvage value. SYD Factors are ratios (percentages) computed as the Year Number in Reverse Order divided by the Sum of Years Digits. Sum of Years Digits is computed by adding the digits that result from numbering each period (year) in useful life. A useful life of three years has the digits 1, 2, and 3. 1 + 2 + 3 = 6 The resultant SYD Factors: Year 1 3 / 6 Year 2 2 / 6 Year 3 1 / 6 Note the ratios are computed as the Year Number in Reverse Order divided by the Sum of Years Digits. We illustrate SYD with a cost of $10,000, a salvage value of $1,000, and a useful life of three years. Year 1 depreciation is 3/6 * $9,000 = $4,500. Year 2 depreciation is 2/6 * $9,000 = $3,000. Year 3 depreciation is 1/6 * $9,000 = $1,500. Note that at the end of useful life: 1. total depreciation equals depreciable cost; 2. book value equals residual value. |
| Disposal of Depreciable Asset | Procedure: 1st: Depreciate the asset to the date of disposal, as necessary. 2nd: Write-off the book value of the asset, increasing a Loss account to balance, as necessary >Example: Assume that depreciation has been revised to the date of disposal. Book value is 500, as follows, when a truck is disposed. Truck 2000 Accumulated Depreciation, Truck -1500 Transaction Analysis Format: Truck - 2000 Accumulated Depreciation, Truck 1500 Loss on Disposal 500 --> Accumulated Depreciation, Truck is a contra account and thus decreased by a positive number Debit Credit Format: Debit..Accumulated Depreciation, Truck 1500 Debit..Loss on Disposal 500 Credit..Truck 2000 |
| Dividends Declared | Increase: Dividends Declared Increase: Dividends Payable Transaction Analysis Format: Dividends Declared -500 Dividends Payable 500 --> Dividends Declared is a contra equity account and thus increased by a negative number Debit Credit Format: Debit Dividends Declared 500 Credit Dividends Payable 500 |
| Ending Inventory, estimating | To estimate ending inventory using the gross profit percentage: 1. Estimate the Cost of Sales: Cost of Sales = (1 - Gross Profit Percentage) * Net Sales 2. Calculate the cost of goods available for sale: Cost Available = Beginning Inventory + Net Purchases 3. Ending Inventory is estimated as: Cost Available less Cost of Sales Example: Gross profit: 25% Net Sales: $10,000 Beginning Inventory: $5,000 Net Purchases: $4,500 Cost of Sales = (1 - 25%) * $10,000 = $7,500 Cost Available = $5,000 + $4,500 = $9,500 Ending Inventory = $9,500 - $7,500 = $2,000 |
| Insurance Expense | When insurance payments are initially recorded as an asset (i.e., prepaid insurance), insurance expense is recorded as an adjusting entry using the following procedure: 1. Determine the amount of insurance that is still prepaid (i.e., 'unexpired') at the end of the period. 2. Obtain the balance of the prepaid insurance account in the general ledger. 3. Insurance expense = 2 - 1 Example: 1. prepaid (unexpired) insurance at end of period = 200 2. balance of the prepaid insurance account = 500 3. Insurance expense = 500 - 200 = 300 Transaction Analysis Format: Insurance Expense 300 Prepaid Insurance -300 Debit Credit Format: Debit..Insurance Expense 300 Credit..Prepaid Insurance 300 When insurance payments are initially recorded as insurance expense, the asset account 'prepaid insurance' is recorded as an adjusting entry using the following procedure: 1. Determine the amount of prepaid insurance at the end of the period. 2. Reduce insurance expense and establish prepaid insurance in the general ledger for this amount. Example: prepaid insurance remaining (unexpired) = 200 Transaction Analysis Format: Prepaid Insurance 200 Insurance Expense -200 Debit Credit Format: Debit..Prepaid Insurance 200 Credit..Insurance Expense 200 |
| Payroll Expense | Payroll expense is recorded for the gross amount that is earned by employees. Payroll taxes and other deductions are made and accrued for future payment. Employees will receive the net amount, which is accrued until actual payment. Example Assume the payroll is as follows: salaries expense (total amount earned by employees) $2,000, accrued payroll payable (the net amount employees will actually receive) $1,200, accrued payroll-taxes (payable to tax authorities on behalf of the employees) $600, and accrued payroll-other (deductions for health care plans, etc. payable to third parties on behalf of the employees) $200. Transaction Analysis Format: Salaries expense 2000 Accrued Payroll 1200 Accrued Payroll-Taxes 600 Accrued Payroll-Other 200 Debit Credit Format: Debit Salaries expense 2000 Credit Accrued Payroll 1200 Credit Accrued Payroll-Taxes 600 Credit Accrued Payroll-Other 200 |
| Petty Cash, establish fund | Increase: Petty Cash Decrease: Cash Transaction Analysis Format: Petty Cash 800 Cash -800 Debit Credit Format: Debit..Petty Cash 800 Credit..Cash 800 |
| Petty Cash, replenish fund | Expenses are recorded as the fund is replenished with cash. Increase: Expense(s) Decrease: Cash The Petty Cash account itself is used only when the level of the fund is being increased or decreased. Transaction Analysis Format: Miscellaneous Expense 800 Cash -800 Debit Credit Format: Debit..Miscellaneous Expense 800 Credit..Cash 800 |
| Property Taxes | Property Taxes, typically billed and paid on a yearly basis, accrue and are recognized as expense on the basis of time. When property taxes are initially recorded as an asset (i.e., prepaid property taxes), property tax expense is recorded as an adjusting entry using the following procedure: 1. Determine the amount of property tax that is still prepaid (i.e., 'unexpired') at the end of the period. 2. Obtain the balance of the prepaid property taxes account in the general ledger. 3. property tax expense = 2 - 1 Example: 1. prepaid (unexpired) property taxes at end of period = 200 2. balance of the prepaid property taxes account = 500 3. property tax expense = 500 - 200 = 300 Transaction Analysis Format: Property Tax Expense 300 Prepaid Property Taxes -300 Debit Credit Format: Debit..Property Tax Expense 300 Credit..Prepaid Property Taxes 300 When property tax payments are initially recorded as property tax expense, the asset account 'prepaid property taxes' is recorded as an adjusting entry using the following procedure: 1. Determine the amount of prepaid property taxes at the end of the period. 2. Reduce property taxes expense and establish prepaid property taxes in the general ledger for this amount. Example: prepaid property taxes remaining (unexpired) = 200 Transaction Analysis Format: Prepaid Property Taxes 200 Property Tax Expense -200 Debit Credit Format: Debit..Prepaid Property Taxes 200 Credit..Property Tax Expense 200 |
| Purchase Returns and Allowances | Purchase returns and allowances occur when a vendor grants reductions in amounts owed to it (i.e., accounts payable) due to returns of goods purchased or allowances for damaged or otherwise unsatisfactory goods. Purchase returns and allowances are recorded in the contra account 'Purchase Returns and Allowances.' In Junior Problems, purchase returns and allowances are recorded as a general journal entry. The entry depends on the whether the Periodic or Perpetual method is being used to account for inventory. Periodic Method Transaction Analysis Format: Accounts Payable -50 Purchase Returns and Allowances -50 --> Purchase Returns and Allowances is a contra account and thus increased by a negative number. Debit Credit Format: Debit: Accounts Payable 50 Credit: Purchase Returns and Allowances 50 Perpetual Method Transaction Analysis Format: Accounts Payable -50 Inventory -50 Debit Credit Format: Debit: Accounts Payable 50 Credit: Inventory 50 Senior problems use the Periodic inventory method, and have a subsidiary accounts payable ledger. Purchase returns and allowances are entered as a credit in the Payments to Vendors form, which is posted to the subsidiary accounts payable ledger. The summary general journal entry is prepared and posted to the general ledger automatically when Post Payments is performed. The general journal entry is output on the Posting Report for review. Advanced problems use the Perpetual inventory method, and have a subsidiary accounts payable ledger and an inventory ledger. Purchase returns and allowances are entered as a credit in the Payments to Vendors form, which is posted to the subsidiary accounts payable ledger. The summary general journal entry is prepared and posted to the general ledger automatically when Post Payments is performed. The general journal entry is output on the Posting Report for review. If goods are returned, they should be deducted in the inventory (software) ledger. Double-click the item quantity to enter the adjustment. No general journal entry is made when goods are returned to a vendor as the inventory ledger does not balance to the general ledger account. |
| Purchases on Account | In Junior Problems, purchases on account are recorded as a general journal entry. The entry depends on the whether the Periodic or Perpetual method is being used to account for inventory. Periodic Method Transaction Analysis Format: Purchases 500 Accounts Payable 500 Debit Credit Format: Debit: Purchases 500 Credit: Accounts Payable 500 Perpetual Method Transaction Analysis Format: Inventory 500 Accounts Payable 500 Debit Credit Format: Debit: Inventory 500 Credit: Accounts Payable 500 Senior problems use the Periodic inventory method, and have a subsidiary accounts payable ledger. Purchases on account are entered in the Purchases form, which is posted to the subsidiary accounts payable ledger. The summary general journal entry is prepared and posted to the general ledger automatically when Post Orders is performed. The general journal entry is output on the Posting Report for review. Advanced problems use the Perpetual inventory method, and have a subsidiary accounts receivable ledger and an inventory ledger. Purchases on account are entered in the Purchases form, which is posted to the subsidiary accounts payable ledger and to the inventory ledger. Summary general journal entries are prepared and posted to the general ledger automatically when Post Orders is performed. The general journal entries are output on the Posting Report for review. |
| Rent Expense | When rent payments are initially recorded as an asset (i.e., prepaid rent), rent expense is recorded as an adjusting entry using the following procedure: 1. Determine the amount of rent that is still prepaid (i.e., 'unexpired') at the end of the period. 2. Obtain the balance of the prepaid rent account in the general ledger. 3. Rent expense = 2 - 1 Example: 1. prepaid (unexpired) rent at end of period = 200 2. balance of the prepaid rent account = 500 3. Rent expense = 500 - 200 = 300 Transaction Analysis Format: Rent Expense 300 Prepaid Rent -300 Debit Credit Format: Debit..Rent Expense 300 Credit..Prepaid Rent 300 When rent payments are initially recorded as rent expense, the asset account 'prepaid rent' is recorded as an adjusting entry using the following procedure: 1. Determine the amount of prepaid rent at the end of the period. 2. Reduce rent expense and establish prepaid rent in the general ledger for this amount. Example: prepaid rent remaining (unexpired) = 200 Transaction Analysis Format: Prepaid Rent 200 Rent Expense -200 Debit Credit Format: Debit..Prepaid Rent 200 Credit..Rent Expense 200 |
| Sales on Account | In Junior Problems, sales on account are recorded as a general journal entry. The entry depends on the whether the Periodic or Perpetual method is being used to account for inventory. Periodic Method Transaction Analysis Format: Accounts Receivable 500 Sales 500 Debit Credit Format: Debit: Accounts Receivable 500 Credit: Sales 500 Perpetual Method Transaction Analysis Format: Accounts Receivable 500 Sales 500 Cost of Goods Sold 300 Inventory -300 Debit Credit Format: Debit: Accounts Receivable 500 Credit: Sales 500 Debit: Cost of Goods Sold 300 Credit: Inventory 300 Senior problems use the Periodic inventory method, and have a subsidiary accounts receivable ledger. Sales on account are entered as orders in the Orders form, which is posted to the subsidiary accounts receivable ledger. The summary general journal entry is prepared and posted to the general ledger automatically when Post Orders is performed. The general journal entry is output on the Posting Report for review. Advanced problems use the Perpetual inventory method, and have a subsidiary accounts receivable ledger and an inventory ledger. Sales on account are entered as orders in the Orders form, which is posted to the subsidiary accounts receivable ledger and to the inventory ledger. Summary general journal entries are prepared and posted to the general ledger automatically when Post Orders is performed. The general journal entries are output on the Posting Report for review. Shipping Charges and Sales Taxes Sales on Account often include amounts billed to the customer for shipping and sales taxes. Shipping charges are billed to customers when terms are F.O.B. shipping point. The separate account ""shipping charges"" is used to distinguish these amounts from sales amounts. If sales taxes must be charged, customers are generally billed for the sales tax and the firm is liable for the sales tax amount until it is remitted to the taxing authority. Transaction Analysis Format: Accounts Receivable 550 Sales 500 Shipping Charges 30 Sales Tax Payable 20 Debit Credit Format: Debit: Accounts Receivable 550 Credit: Sales 500 Credit: Shipping Charges 30 Credit: Sales Tax Payable 20 |
| Sales Returns and Allowances | Sales returns and allowances occur when customers are granted reductions in amounts due a company (i.e., accounts receivable) owing to returns of goods purchased or allowances for damaged or otherwise unsatisfactory goods. Sales returns and allowances are recorded in the contra account 'Sales Returns and Allowances.' Alternatively, separate accounts 'Sales Returns' and 'Sales Allowances' might be used. In Junior Problems, sales returns and allowances are recorded as a general journal entry. The entry depends on the whether the Periodic or Perpetual method is being used to account for inventory. Periodic Method Transaction Analysis Format: Sales Returns and Allowances -50 Accounts Receivable -50 --> Sales Returns and Allowances is a contra revenue account and thus increased by a negative number. Debit Credit Format: Debit: Sales Returns and Allowances 50 Credit: Accounts Receivable 50 Perpetual Method Sales allowances that do NOT involve the return of goods by the customer are recorded using a sales allowance account, as discussed and shown above for the Periodic method. When goods are returned, sales returns are recorded using two entries. One entry reduce the amount owed by the customer. The second entry increases inventory and decreases Cost of Goods Sold for the cost of goods returned. Transaction Analysis Format: Sales Returns and Allowances -50 Accounts Receivable -50 Inventory 20 Cost of Goods Sold -20 Debit Credit Format: Debit: Sales Returns and Allowances 50 Credit: Accounts Receivable 50 Debit: Inventory 20 Credit: Cost of Goods Sold 20 Senior problems use the Periodic inventory method, and have a subsidiary accounts receivable ledger. Sales returns and allowances are entered as a credit in the Receipts on Account form, which is posted to the subsidiary accounts receivable ledger. The summary general journal entry is prepared and posted to the general ledger automatically when Post Receipts is performed. The general journal entry is output on the Posting Report for review. Advanced problems use the Perpetual inventory method, and have a subsidiary accounts receivable ledger and an inventory ledger. Sales returns and allowances are entered as a credit in the Receipts on Account form, which is posted to the subsidiary accounts receivable ledger. The summary general journal entry is prepared and posted to the general ledger automatically when Post Receipts is performed. The general journal entry is output on the Posting Report for review. If goods are returned, they should be added to the inventory (software) ledger. Double-click the item quantity to enter the adjustment. A general journal entry to increase inventory and decrease the cost of sales for the cost of the goods returned is posted to the general ledger when the quantity is adjusted. |
| Stock Dividend | A stock dividend is a pro-rata distribution of stock shares to shareholders. The entry to record the dividend depends on its size. Market price is used when it is less than 25%; otherwise, par value is used. A stock dividend does not change the total amount of stockholders' equity. >Example: stock dividend of 10 shares (2%); market price $10 Transaction Analysis Format: Retained Earnings -100 Common Stock ($2 Par) +20 Paid-in Capital +80 Debit Credit Format: Debit..Retained Earnings 100 Credit..Common Stock ($2 Par) 20 Credit..Paid-in Capital 80 |
| Supplies Expense | Supplies expense is incurred to the extent that supplies are consumed during a period. When purchases of supplies are initially recorded as an asset, supplies expense is recorded as an adjusting entry using the following procedure: 1. Determine the amount of supplies on-hand at the end of the period. 2. Obtain the balance of the supplies account in the general ledger. 3. Supplies expense = 2 - 1 Example: 1. supplies on-hand = 200 2. balance of the supplies account = 500 3. Supplies expense = 500 - 200 = 300 Transaction Analysis Format: Supplies Expense 300 Supplies -300 Debit Credit Format: Debit..Supplies Expense 300 Credit..Supplies 300 When purchases of supplies are initially recorded as an expense, the asset account 'supplies' is recorded as an adjusting entry using the following procedure: 1. Determine the amount of supplies on-hand at the end of the period. 2. Reduce supplies expense and establish supplies in the general ledger for this amount. Example: supplies on-hand = 200 Transaction Analysis Format: Supplies 200 Supplies Expense -200 Debit Credit Format: Debit..Supplies 200 Credit..Supplies Expense 200 |
| Transportation In | Purchases on account often include amounts billed by the vendor for shipping charges. The account 'Transportation In' (synonym: 'Freight In') is used to distinguish these amounts from purchases amounts. In Junior Problems, transportation in charges for purchases on account are recorded as a general journal entry. The entry depends on the whether the Periodic or Perpetual method is being used to account for inventory. Periodic Method Transaction Analysis Format: Transportation In 50 Accounts Payable 50 Debit Credit Format: Debit: Transportation In 50 Credit: Accounts Payable 50 Perpetual Method Transaction Analysis Format: Inventory 50 Accounts Payable 50 Debit Credit Format: Debit: Inventory 50 Credit: Accounts Payable 50 |
| Treasury Stock, cost exceeds proceeds | Increase: Cash Decrease: Treasury Stock for cost of shares Decrease: Paid-in Capital to balance >Example: sale for 800 when cost of shares is 1000 Transaction Analysis Format: Cash 800 Treasury Stock 1000 Paid-in Capital -200 --> Treasury Stock is a contra equity account and thus decreased by a positive number Debit Credit Format: Debit..Cash 800 Debit..Paid-in Capital 200 Credit..Treasury Stock 1000 |
| Treasury Stock, proceeds exceed cost | Increase: Cash Decrease: Treasury Stock for cost of shares Increase: Paid-in Capital to balance Example: sale for 1000 when cost of shares is 800 Transaction Analysis Format: Cash 1000 Treasury Stock 800 Paid-in Capital 200 --> Treasury Stock is a contra equity account and thus decreased by a positive number Debit Credit Format: Debit..Cash 1000 Credit..Treasury Stock 800 Credit..Paid-in Capital 200 |
| Treasury Stock, purchase | Increase: Treasury Stock Decrease: Cash Transaction Analysis Format: Treasury Stock - 1000 Cash - 1000 --> Treasury Stock is a contra equity account and thus increased by a negative number Debit Credit Format: Debit..Treasury Stock 1000 Credit..Cash 1000 |
| Unearned Revenue | Unearned Revenue is a liability that results when customers make prepayment for services to be provided at a later date. Revenue is earned when goods or services are provided to customers, regardless of whether cash has been collected. Deferred Revenue is a synonym for Unearned Revenue. When Unearned Revenue is initially recorded as a liability, revenue earned is recorded as an adjusting entry using the following procedure: 1. Determine the amount of Unearned Revenue at the end of the period. 2. Obtain the balance of the Unearned Revenue account in the general ledger. 3. Earned revenue = 2 - 1 Example: 1. Unearned Revenue at end-of-period = 200 2. balance of the Unearned Revenue account = 500 3. earned revenue = 500 - 200 = 300 Transaction Analysis Format: Unearned Revenue -300 Revenue 300 Debit Credit Format: Debit..Unearned Revenue 300 Credit..Revenue 300 When prepayments from customers (i.e., unearned revenues) are initially recorded as revenue, the liability account Unearned Revenue is recorded as an adjusting entry using the following procedure: 1. Determine the amount of Unearned Revenue at the end of the period. 2. Reduce revenue and establish Unearned Revenue in the general ledger for this amount. Example: Unearned Revenue = 200 Transaction Analysis Format: Revenue -200 Unearned Revenue 200 Debit Credit Format: Debit..Revenue 200 Credit..Unearned Revenue 200 |
| Unexpired Costs | Unexpired costs are assets. Expired costs are expenses. When costs (i.e., expenditures) are originally recorded as assets (i.e., prepaid insurance, prepaid rent, supplies, etc.), the related expense is recorded as an adjusting entry using the following procedure: 1. Determine the amount of cost that is still unexpired (synonym: 'prepaid') at the end of the period. 2. Obtain the balance of the asset account in the general ledger. 3. Expense = 2 - 1 Example: Insurance 1. prepaid (unexpired) insurance at end of period = 200 2. balance of the prepaid insurance account = 500 3. Insurance expense = 500 - 200 = 300 Transaction Analysis Format: Insurance Expense 300 Prepaid Insurance -300 Debit Credit Format: Debit..Insurance Expense 300 Credit..Prepaid Insurance 300 The adjusting entry adjusts the asset account to the unexpired amount. When costs (i.e., expenditures) are initially recorded as expenses, the related asset account (i.e., the unexpired cost) is recorded as an adjusting entry using the following procedure: 1. Determine the amount of cost that is still unexpired at the end of the period. 2. Reduce the related expense and establish the related asset account (i.e., unexpired cost) in the general ledger for this amount. Example: prepaid insurance remaining (unexpired) = 200 Transaction Analysis Format: Prepaid Insurance 200 Insurance Expense -200 Debit Credit Format: Debit..Prepaid Insurance 200 Credit..Insurance Expense 200 |
| Write-off of Account Receivable | When an account is deemed to be uncollectible, the customer's account balance is written-off. This means that the customer's account balance in the subsidiary accounts receivable ledger is reduced to zero. The accounts receivable control account in the general ledger must be also be adjusted in order that it continue to balance to the subsidiary accounts receivable ledger. Procedure: Junior Problems Junior problems do not have a subsidiary accounts receivable ledger. Thus, only a general journal entry is required. Example: A $200 account balance is to be written-off. Transaction Analysis Format: Allowance for Bad Accounts 200 Accounts receivable -200 --> Allowance for Bad Accounts is a contra asset account and thus decreased by a positive number Debit Credit Format: Debit Allowance for Bad Accounts 200 Credit Accounts receivable 200 Procedure: Senior Problems Senior problems have a subsidiary accounts receivable ledger. Follow the procedure indicated in the problem to reduce the customer's account balance in the subsidiary accounts receivable ledger to zero and to adjust the general ledger for the write-off. Note that a write-off does not involve the bad debt expense account. Bad debt expense is estimated and recorded as an adjusting entry to match the expense to the accounting period in which the sales revenues were recognized. Note also that the write-off of an uncollectible account does not change the book value of accounts receivable. |