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1、应收账款外文文献1.Accounts Receivable One of the key factors underlying the growth of the American economy is the trend toward selling goods and services on credit. Accounts receivable comprise the largest financial asset of many merchandising companies. Accounts receivable are relatively liquid assets, usu
2、ally converting into cash within a period of 30 to 60 days. Therefore, accounts receivable from customers usually appear in the balance sheet immediately after cash and short-term investments in marketable securities. 2.UNCOLLECTIBLE ACCOUNTS Accounts receivable are shown in the balance sheet at the
3、 estimated collectible amountcalled net realizable value. No business wants to sell merchandise on account to customers who will be able to pay. Many companies maintain their own credit departments that investigate the creditworthiness of each prospective customer. Nonetheless, if a company makes cr
4、edit sales to hundredsperhaps thousandsof customers, some accounts inevitably will turn out to be uncollectible. A limited amount of uncollectible accounts is not only expectedit is evidence of a sound credit policy. If the credit department is overly cautious, the business may lose many sales oppor
5、tunities by rejecting customers who should have been considered acceptable credit risks. 3.THE ALLOWANCE FOR DOUBTFUL ACCOUNTS There is no way of telling in advance which accounts receivable will prove to be uncollectible. It is therefore not possible to credit the accounts of specific customers for
6、 our estimate of probable uncollectible accounts. Neither should we credit the Accounts Receivable control account in the general ledger. If the Accounts Receivable control accounts were to be credited with the estimated amount of doubtful accounts, this control account would no longer be in balance
7、 with the total of the numerous customers accounts in the subsidiary ledger. A practical alternative therefore is to credit a separate account called Allowance for Doubtful Accounts with the amount estimated to be uncollectible. The Allowance for Doubtful Accounts often is described as a contra-asse
8、t account or a valuation account. Both of these terms indicate that the Allowance for Doubtful Accounts has a credit balance, which is offset against the asset Accounts Receivable to produce a more useful and reliable measure of a companys liquidity. Because the Allowance for Doubtful Accounts is me
9、rely an estimate and not a precise calculation, professional judgment plays a considerable role in determining the size of this valuation account. Monthly Adjustment of the Allowance Account In the adjusting entry made by World Famous Toy Co. at January 31, the amount of the adjustment ($10,000) was
10、 equal to the estimated amount of uncollectible accounts. This is true only because January was the first month of operations and this was the companys first estimate of its uncollectible accounts. In future months, the amount of the adjusting entry will depend on two factors: (1) the estimate of un
11、collectible accounts and (2) the current balance in the Allowance for Doubtful Accounts. Before we illustrate the adjusting entry for a future month, let us see why the balance in the allowance account may change during the accounting period. WRITING OFF AN UNCOLLECTIBLE ACCOUNT RECEIVABLE Whenever
12、an account receivable from a specific customer is determined to be uncollectible, it no longer qualifies as an asset and should be written off. To write off an account receivable is to reduce the balance of the customers account to zero. The journal entry to accomplish this consists of a credit to t
13、he Accounts Receivable control account in the general ledger (and to the customers account in the subsidiary ledger) and an offsetting debit to the Allowance for Doubtful Accounts. To illustrate, assume that, early in February, World Famous Toy Co. learns that Discount Stores has gone out of busines
14、s and that the $4,000 account receivable from this customer is now worthless. The entry to write off this uncollectible account receivable is: Allowance for Doubtful Accounts 4,000 Accounts Receivable (Discount Stores) 4,000 To write off the account receivable from Discount Stores as uncollectible.
15、The important thing to note in this entry is that the debit is made to the Allowance for Doubtful Accounts and not to the Uncollectible Accounts Expense account. The estimated expense of credit losses is charged to the Uncollectible Accounts Expense account at the end of each accounting period. When
16、 a specific account receivable is later determined to be worthless and is written off, this action does not represent an additional expense but merely confirms our previous estimate of the expense. If the Uncollectible Accounts Expense account was first charged with estimated credit losses and then
17、later charged with proven credit losses, we would be double-counting the actual uncollectible accounts expense. Notice also that the entry to write off an uncollectible account receivable reduces both the asset account and the contra-asset account by the same amount. Thus writing off an uncollectibl
18、e account does not change the net realizable value of accounts receivable in the balance sheet. INTERNAL CONTROLS FOR RECEIVABLES One of the most important principles of internal control is that employees who have custody of cash or other negotiable assets must not maintain accounting records. In a
19、small business, one employee often is responsible for handing cash receipts, maintaining accounts receivable records, issuing credit memoranda, and writing off uncollectible accounts. Such a combination of duties is an invitation to fraud. The employee in this situation is able to remove the cash co
20、llected from a customer without making any record of the collection. The next step is to dispose of the balance in the customers account. This can be done by issuing a credit memo indicating that the customer has returned merchandise, or by writing off the customers account as uncollectible. Thus th
21、e employee has the cash, the customers account shows a zero balance due, and the books are in balance. In summary, employees who maintain the accounts receivable subsidiary ledger should not have access to cash receipts. The employees who maintain accounts receivable or handle cash receipts should n
22、ot have authority to issue credit memoranda or to authorize the write-off of receivables as uncollectible. These are classic examples of incompatible duties. MANAGEMENT OF ACCOUNTS RECEIVABLE Management has two conflicting objectives with respect to the accounts receivable. On the one hand, manageme
23、nt wants to generate as much sales revenue as possible. Offering customers lengthy credit terms, with little or no interest, has proven to be an effective means of generating sales revenue. Every business, however, would rather sell for cash than on account. Unless receivables earn interest, which u
24、sually is not the case, they are nonproductive assets that produce no revenue as they await collection. Therefore, another objective of cash management is to minimize the amount of money tied up in the form of accounts receivable. Several tools are available to a management that must offer credit te
25、rms to its customers yet wants to minimize the companys investment in accounts receivable. We have already discussed offering credit customers cash discounts (such as 2/10, n/30) to encourage early payment. Other tools include factoring accounts receivable and selling to customers who use national credit cards.
