In this section, we’ll explain the accounting of accounts receivable. By the end of this section, you’ll be able to…
Debt factoring or factoring of receivables is the process where an entity sells its receivables (unpaid invoices) to another entity.…
We know that with receivables, there is always a risk that an entity may not be able to collect the…
Receivables ageing analysis is a useful analysis based on the accounts receivable ageing report. But what is an accounts receivable…
Contrary to allowance method of recording bad debts, direct write-off method does not require estimation of credit losses. When a…
In this post, we’ll go through an illustration to understand the mechanism of calculating allowance for bad debts. Illustration
If an entity has a small number of debtors, expected credit losses can be estimated by considering the historical trends…
Allowance method is based on estimation and there is a possibility that circumstances change favorably for an entity. A debtor…
Businesses tend to sell their goods and services on credit to increase their sales. If businesses do not offer credit…
Credit sales are a common feature of the modern trade. Offering credit sales means that businesses are willing to assume…