Introduction

Business success is realised with effective receivable management. This chapter examines the accounting for receivables, focusing on how businesses account for the recording, reporting and collection (or non-collection) of accounts receivables. It explains and demonstrates the methods of estimating and recording bad debt expenses that apply under generally accepted accounting principles (GAAP).

Chapter outline

After reading this chapter, you should be able to:

1. Describe the recording of receivables
2. Describe the reporting of receivables
3. Understand the methods used to account for uncollectible receivables (bad debts),  estimate bad debt expense and manage the provision for doubtful debts