Week 9 - Receivables

Receivables are frequently classified as:

• Accounts receivable, company receivables, and other receivables.

• Accounts receivable, notes receivable, and employee receivables

• Accounts receivable and general receivables.

• Accounts receivable, notes receivable, and other receivables.

On May 1, Wilton sold merchandise on account to Bates for RM50,000 terms 3/15, net 45. What do these terms: 3/15, net 45 mean?

• 15% discount if payment made in 3 days, otherwise net payment in 45 days

• 3% discount if payment made in 15 days, otherwise full payment in 45 days

• 15% discount if payment made in 12 days, otherwise full payment after 45 days

• 3% discount if payment made in 12 days, otherwise full payment after 45 days

On May 1, Wilton sold merchandise on account to Bates for RM50,000 terms 3/15, net 45. What is the entry for this transaction?

• Accounts Receivable—Bates 50,000

  Sales Revenue 50,000

• Cash—Bates 50,000

  Sales Revenue 50,000

• Accounts Receivable—Bates 50,000

  Inventory 50,000

• Other Receivable—Bates 50,000

  Sales Revenue 50,000

On May 1, Wilton sold merchandise on account to Bates for RM50,000 terms 3/15, net 45. On May 4, Bates returns merchandise with a sales price of RM2,000. Record the transaction for May 4:

• Sales Discount 2,000

  Accounts Receivable—Bates 2,000

• Sales Returns and Allowances 2,000

  Accounts Receivable—Bates 2,000

• Accounts Receivable—Bates 2,000

  Sales Returns and Allowances 2,000

• Accounts Receivable—Bates 2,000

  Inventory 2,000

On May 1, Wilton sold merchandise on account to Bates for RM50,000 terms 3/15, net 45. On May 4, Bates returns merchandise with a sales price of RM2,000. On May 16, Wilton receives payment from Bates for the balance due. Prepare journal entry for the May 16.

• Cash (RM50,000 - RM2,000) 48,000

  Accounts Receivable—Bates 48,000

• Cash (RM50,000 - RM7,500) 42,500

  Sales Discounts (RM50,000 x .15) 7,500

  Accounts Receivable—Bates 50,500

• Cash (RM48,000 - RM7,200) 40,800

  Sales Discounts (RM48,000 x .15) 7,200

  Accounts Receivable—Bates 48,000

• Cash (RM48,000 - RM1,440) 46,560

  Sales Discounts (RM48,000 x .03) 1,440

  Accounts Receivable—Bates 48,000