Acc 291 Week 2 Summary

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Week Two Summary
ACC/291

Abstract

During the first two weeks, Learning Team “A” studied several objectives. During Week One, we learned how to prepare journal entries to account for transactions related to accounts receivable and bad debt using both percentage of sales and the percentage of receivables methods, ways to distinguish between tangible and intangible assets, the means to identify the entries associated with acquisition, disposal, and sales of plant assets, and closed out the week by distinguishing between revenue and capital expenditures, and the entries associated with each. As we advanced into Week Two, we studied how to differentiate among accounts payable, notes payable and accrued expenses, methods to properly prepare necessary journal entries to record the issuance of bonds, the periodic interest, and amortization of bond premiums and discounts, and finally the procedures to calculate depreciation and amortization expense using various methods.

Learning Team "A" - Week Two Summary
When it comes to preparing journal entries, there are different methods that are used with accounts receivable and bad debts such as the percentage of sales and the percentage of receivable methods. The percentage of sales estimates what percentage of credit sales will be uncollectible. This percentage is based on past experience and projected credit policy. The company applies this percentage to either the credit sales or the net credit sales of that current year. The percentage of receivables estimates what percentage of receivables will result in losses from the uncollectible accounts. The company uses an aging schedule in which classifies customer balances by the length of time they have been unpaid. After the company arranges the accounts by age, it determines the expected bad debt losses. The longer a receivable is past due, the less likely that it will be collected. As defined in our text "Intangible assets are rights, privileges and...
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