I n t h i s s e c t i o n w e w i l l c o v e r :uraccounted4accounting.com
Direct vs Indirect
I n t h i s s e c t i o n w e w i l l c o v e r :
Direct vs IndirectSales - A/R - Cash In
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I n t h i s s e c t i o n w e w i l l c o v e r :
Direct vs IndirectSales - A/R - Cash InAllowance forDoubtful Accounts
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CASH FLOWSFROM
OPERATINGACTIVITIES
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INTERACTIONSIncome Statement
andBalance Sheet
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CASH FROMCUSTOMERS
SalesIncome Statement
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DEBIT: A/RCREDIT: Sales
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CASH FROMCUSTOMERS
A/RBalance Sheet
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SALES $1 ,000 ,000
A/R - end of year (100 ,000)
Collected? 900 ,000
PROBABLY NOT
WE NEEDTHE
CHANGEIN A /R
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SALES $1 ,000 ,000
A/R - end of year (100 ,000)
A/R - beginning of year 95 ,000
Collected? 995 ,000
MAYBE
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A/R (5,000)Sales
>Collections
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ALLOWANCEFOR
DOUBTFULACCOUNTS
CollectWrite Off
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A/R GOES DOWN WHEN:
AllowanceBad DebtExpense
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WATCH FOR
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▲ ALLOWANCE<
BAD DEBT EXP=
WRITE OFFS
Net Change $1,000
Bad Debt Exp $1,500
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+$1,500Allowance =
$4,500
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WRITE OFFS
=
$500
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SALES $1 ,000 ,000
A/R - end of year (100 ,000)
A/R - beginning of year 95 ,000
Collected ?????????
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NET▲ A/R = +$5,000WRITE OFFS = $500
REAL ▲ A/R = +$5,500
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SALES $1 ,000 ,000
A/R - end of year (100 ,000)
A/R - beginning of year 95 ,000
WRITE OFFS ( 500)
Collected $994 ,500
R e c a p o f w h a t w e c o v e r e d :
$ Received andPaid
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R e c a p o f w h a t w e c o v e r e d :
$ Received andPaid
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Sales and ▲ A/R
R e c a p o f w h a t w e c o v e r e d :
$ Received andPaidSales and ▲ A/R
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Adjust For WriteOffs
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