会计英语unit 7 Assets—Current Assets Ⅱ.pptVIP

Unit 7 Assets—Current Assets Ⅱ Ⅰ.Receivables Ⅱ.Prepayment Ⅲ. Inventory Current assets are assets that are expected to be converted to cash, sold or consumed within 12 months or within the business’s normal operating cycle if longer than a year. Ⅰ.Receivables Accounts Receivable Notes Receivable Other Receivables 1.Accounts Receivable Accounts receivable are the receivables collected by a business in selling products, goods or services. (1)Accounting of Accounts Receivable Dr. Accounts Receivable Cr. Sales Revenue Discount Commercial Discount It is usually expressed as a percentage, such as 5%,10%,etc. It does not affect the entry value of accounts receivable but is only considered the adjustment of prices. Cash Discount It normally appears as “2/10,1/20,n/30” on the invoice. 2/10 means a discount of 2% of the gross invoice price is deductible for payments within 10 days; 1/20 means 1% deductible for payments within 20 days; n/30 means that no discount if the payment is after 30 days following the invoicing date. Cash Discount Dr. Accounts Receivable Cr. Sales Revenue Example ---- Cash Discount On June 1, K15 sold merchandise of $50,000 to Speed 5 on credit. The credit term was 2/10,1/20,n/30, and Speed 5 paid the money on June 18. (2)Accounting of Uncollectible Receivables -Bad Debts Definition All receivables shall be cleared and collected on time and shall be checked with related parties periodically. Regardless of the caution used in granting credit and the collection procedures used, a part of the credit sales may still become uncollectible. This is called bad debts. Any accounts receivable, proved to be definitely uncollectible, shall be recognized as bad debts and written off against provision for bad debts or charged to current profit or loss. Any subsequent recoveries for bad debts written off shall be credited to the provision of bad debts. How to record bad debts 1)Direct Wr