Your wallet contains many personal items that can be used to steal your identity if lost or stolen. You should minimize what you carry and only keep essential items like a driver's license, credit card, and health card. If your wallet is lost or stolen, quickly contact credit bureaus, creditors, and government agencies to report the loss and change passwords. Filing a police report can help prove identity theft and aid in recovering identification documents. Acting immediately limits damage and secures your personal information and finances.
The Hidden Impact of Your Payment Processor May Be Killing Your BusinessRussell Street Report
This document discusses how hidden fees from payment processors can negatively impact businesses. It outlines various fees like late fees, service fees, management fees, and more that businesses may be charged without realizing. The document urges businesses to carefully understand the basics of payment processing and ensure they are not being overcharged for things like transaction fees, account updates, declined payments, and cash flow deposits. Choosing the right payment processor is important to protect a business's reputation and finances.
The document discusses bank reconciliation, which is the process of verifying that a company's bank statement balances match the transactions recorded in its general ledger. It involves adjusting the balance on the bank statement and in the company's cash account to determine the true cash balance. The adjustments include adding deposits made but not recorded by the bank, subtracting outstanding checks, and recording bank charges or interest not yet booked. Journal entries are needed to update the cash account for any differences.
Al Noshirvani - Payment Processing Hidden FeesAl Noshirvani
This document discusses how payment processors can charge hidden fees that negatively impact businesses. It outlines several types of fees processors may charge, such as per transaction fees over the actual interchange rate, fees for account updates, multiple resubmission fees for declined payments, and delays in depositing funds. The document advises businesses to carefully audit their payment processing statements to avoid unnecessary fees and ensure their processor deposits funds within 1-2 days of billing. Choosing the right processor is important to protect a business's reputation and cash flow.
1) The document discusses bank reconciliation statements, which reconcile a business's bank account records with its bank statement each month.
2) A bank reconciliation statement lists adjustments like unpresented checks and uncredited deposits to explain differences between the ending balances in the bank account and bank statement.
3) It walks through preparing a bank reconciliation statement step-by-step, including updating the bank account, identifying reconciling items, and completing the statement to show equal ending balances.
The document discusses bank reconciliation statements. It explains that a bank reconciliation statement is prepared to reconcile differences between a business's bank balance recorded in their cash book and the balance shown on their bank statement. Reasons for differences include outstanding checks, deposited funds not cleared, bank charges, and errors. To prepare the reconciliation statement, items increasing one balance are added and items decreasing it are subtracted. This reconciles the two balances and identifies outstanding transactions.
know the Importance and Need of Bank Reconciliation Statement.
Understand the Causes for Disagreement between Cash Book and Pass Book Balances.
Prepare Bank Reconciliation Statement.
This document provides information about economics and accounting coaching classes offered by Khalid Aziz. It lists the subjects covered such as microeconomics, macroeconomics, statistics, financial accounting, and cost accounting. Contact details are provided at the end.
Your wallet contains many personal items that can be used to steal your identity if lost or stolen. You should minimize what you carry and only keep essential items like a driver's license, credit card, and health card. If your wallet is lost or stolen, quickly contact credit bureaus, creditors, and government agencies to report the loss and change passwords. Filing a police report can help prove identity theft and aid in recovering identification documents. Acting immediately limits damage and secures your personal information and finances.
The Hidden Impact of Your Payment Processor May Be Killing Your BusinessRussell Street Report
This document discusses how hidden fees from payment processors can negatively impact businesses. It outlines various fees like late fees, service fees, management fees, and more that businesses may be charged without realizing. The document urges businesses to carefully understand the basics of payment processing and ensure they are not being overcharged for things like transaction fees, account updates, declined payments, and cash flow deposits. Choosing the right payment processor is important to protect a business's reputation and finances.
The document discusses bank reconciliation, which is the process of verifying that a company's bank statement balances match the transactions recorded in its general ledger. It involves adjusting the balance on the bank statement and in the company's cash account to determine the true cash balance. The adjustments include adding deposits made but not recorded by the bank, subtracting outstanding checks, and recording bank charges or interest not yet booked. Journal entries are needed to update the cash account for any differences.
Al Noshirvani - Payment Processing Hidden FeesAl Noshirvani
This document discusses how payment processors can charge hidden fees that negatively impact businesses. It outlines several types of fees processors may charge, such as per transaction fees over the actual interchange rate, fees for account updates, multiple resubmission fees for declined payments, and delays in depositing funds. The document advises businesses to carefully audit their payment processing statements to avoid unnecessary fees and ensure their processor deposits funds within 1-2 days of billing. Choosing the right processor is important to protect a business's reputation and cash flow.
1) The document discusses bank reconciliation statements, which reconcile a business's bank account records with its bank statement each month.
2) A bank reconciliation statement lists adjustments like unpresented checks and uncredited deposits to explain differences between the ending balances in the bank account and bank statement.
3) It walks through preparing a bank reconciliation statement step-by-step, including updating the bank account, identifying reconciling items, and completing the statement to show equal ending balances.
The document discusses bank reconciliation statements. It explains that a bank reconciliation statement is prepared to reconcile differences between a business's bank balance recorded in their cash book and the balance shown on their bank statement. Reasons for differences include outstanding checks, deposited funds not cleared, bank charges, and errors. To prepare the reconciliation statement, items increasing one balance are added and items decreasing it are subtracted. This reconciles the two balances and identifies outstanding transactions.
know the Importance and Need of Bank Reconciliation Statement.
Understand the Causes for Disagreement between Cash Book and Pass Book Balances.
Prepare Bank Reconciliation Statement.
This document provides information about economics and accounting coaching classes offered by Khalid Aziz. It lists the subjects covered such as microeconomics, macroeconomics, statistics, financial accounting, and cost accounting. Contact details are provided at the end.
1. The document summarizes key concepts related to accounting for sales revenue, receivables, and cash including revenue recognition principles, credit card sales, sales discounts, sales returns and allowances, bad debts, and cash controls.
2. It also discusses calculating ratios like gross profit percentage, receivables turnover, average collection period, and preparing bank reconciliations.
3. Examples are provided of journal entries for credit card sales, sales discounts, sales returns, estimating bad debts expense, and reconciling cash accounts.
AC1220 ACCOUNTING I Lab 4.2
AC1220 Lab 4.2
Introduction
Jake’s Computer Sales and Repair has an accounts receivable balance of $6,520 as of May 31, 20x1. Jake maintains an aging-of-accounts schedule listing a time outstanding (or “age”) of the invoice amounts that make up each customer’s receivable balance.
Requirement 1
a. Compute the estimated uncollectible amount for each customer in the aging schedule. Enter amounts in the appropriate cells, rounding to the nearest dollar.
b. Compute the total estimated allowance for the uncollectible account balance. Enter the amount in the appropriate cell.
Uncollectible Accounts Schedule at May 31, 20x1
Customer Name
Account Number
1-30 Days
31-60 Days
61-90 Days
Over 90 Days
Totals
Atterbury
1001
$850
$250
-
-
$1,100
Smith
1002
1,320
2,900
$480
-
$4,700
Walten
1003
-
-
50
40
$90
Total
$2,170
$3,150
$530
$40
$6,520
Estimated percent uncollectible
x 2%
x 5%
x 10%
x 90%
Estimated allowance for uncollectible accounts
Requirement 2
a. Make the necessary journal entry to establish an allowance for the uncollectible accounts account. Use the target allowance for the uncollectible accounts balance computed in Requirement 1.
DATE
DETAILS
DEBIT
CREDIT
5/31/x1
b. Post the entry from Requirement 2a and account receivable balance to the following T-Accounts:
Uncollectible Account Expense
Allowance for Uncollectible Accounts
Accounts Receivable
c. Show the disclosure of net accounts receivable in the following partial balance sheet:
In the current assets section of the balance sheet:
Accounts Receivable, Net
Requirement 3
Jake is informed in writing that a customer, Walten, has filed for bankruptcy and will be unable to settle an account receivable of $90.
Make the journal entry necessary to write off this amount.
DATE
DETAILS
DEBIT
CREDIT
5/31/x1
Requirement 4
Jake receives notice from Walten’s attorney that Jake’s Computer Sales and Repair will receive $0.50 on the dollar of the $90 account receivable previously written off. A check for that amount is included.
Journalize the partial reinstatement and recovery of Walten’s account receivable.
DATE
DETAILS
DEBIT
CREDIT
5/31/x1
Requirement 5
Customer Smith’s account receivable balance of $480 is more than 60 days old. Jake and Smith agree to reclassify this amount as a note payable with a six-month maturity and a 15 percent annual interest rate.
Jake makes the following journal entry:
DATE
DETAILS
DEBIT
CREDIT
5/31/x1
Note Receivable
$480
Accounts Receivable
$480
To record 15% note receivable
Compute the interest and principle components of the payment that Smith will make on June 30, 20x1, on the note payable.
Hint: Principal x Interest Rate x Days/365 = Amount of Interest
Requirement 6
Requirement 6
Jake considers using the direct write-off method to account for uncollectible accounts. He would debit the uncollectible account expense a.
(1) The Allowance for Doubtful Accounts is a contra-asset account subtracted from accounts receivable on the balance sheet.
(2) The actual write-off entry does not reduce net receivables.
(3) The estimation error inherent in the allowance method is more acceptable than violating the matching principle with the direct write-off method.
Discounting, Factoring & Forfaiting in Financial ServicesKiruba Devi
This document provides information on discounting, factoring, and forfaiting. It defines discounting as the process of converting future values to present values. It describes different types of bill discounting such as sales bill discounting. Factoring is defined as the purchase of receivables by a financial organization called a factor. The document outlines the mechanics and types of factoring such as recourse and non-recourse factoring. Forfaiting is described as the purchase of export receivables without recourse to the exporter by a financial intermediary called a forfaiter. The essential requisites and mechanics of forfaiting transactions are also discussed.
This document discusses strategies for managing a firm's working capital, including accounts receivable, inventory, and cash. It covers establishing credit policies, analyzing customer creditworthiness, collecting accounts receivable, managing inventory levels, and investing idle cash. The goal is to minimize costs associated with carrying accounts receivable, inventory, and cash while maintaining sufficient liquidity to operate the business.
This document discusses receivable financing, which allows a company to raise funds using its accounts receivable. It describes pledge, assignment, and factoring of receivables. Pledging involves using receivables as collateral for a bank loan. The company retains collection rights but may need to remit funds to the bank. Accounting involves recording the loan and subsequent payments. Financial statements must disclose pledged receivables. Illustrations demonstrate journal entries for pledging receivables and repaying a loan.
Invoice finance provides businesses with early access to cash from their unpaid invoices. There are two main types: factoring involves the invoice financier collecting payment from customers, while invoice discounting requires the business to pursue customers for payment. While invoice finance can provide cash flow benefits, businesses should understand all associated costs and terms to avoid surprises. Compare Funding can help businesses find the most suitable invoice financing option.
This document provides examples of accounting entries for uncollectible accounts (bad debts) using both the direct write-off method and provision method. Under the direct write-off method, uncollectible accounts are directly expensed against accounts receivable when deemed uncollectible. The provision method estimates bad debts at the end of each period by debiting bad debt expense and crediting an allowance account to match expenses with revenues. When debts are written off, the allowance is reduced and receivables are credited.
Commercial banks have the ability to create credit through the process of lending deposits. When a bank grants a loan, it credits the borrower's account, creating new deposits. These derivative deposits can then be lent out again, resulting in multiple expansion of credit in the banking system. The initial deposit of Rs. 1,000 in Bank A resulted in total bank credit of Rs. 1,952 across three banks, demonstrating how one primary deposit can multiply into much higher credit amounts. However, banks' ability to create credit is limited by reserve requirements, economic conditions, and other factors controlled by the central bank.
This document provides an overview of the CIMA C02 Fundamentals of Financial Accounting exam, including key terms and concepts. It discusses topics like trading accounts, markups, gross profit calculations, control accounts, and accounting for non-profit organizations. Sample exam questions are provided covering receipts and payments accounts, annual subscription accounts, and the regulatory framework for financial accounting. Key terms are highlighted that indicate certain accounting treatments should be used for exam questions involving topics like trading, debtors, creditors, and non-profit organizations.
Accounting for Receivables Lecture PPT.pptxjuweldba
a. Total estimated uncollectible:
March sales (1-30 days) - 2% of 65,000 = 1,300
February sales (31-60 days) - 5% of 17,600 = 880
January sales (61-90 days) - 30% of 8,500 = 2,550
Prior to January (over 90 days) - 50% of 7,000 = 3,500
Total estimated uncollectible = 1,300 + 880 + 2,550 + 3,500 = 8,230
b. Adjusting entry at March 31:
Bad debts expense Dr. 8,230
Allowance for doubtful accounts Cr. 8,230
(To record estimated
A bank reconciliation statement is prepared to reconcile the differences between the balances as per the cash book and as per the bank statement/pass book. It identifies timing differences in recording transactions as well as errors in the cash book or pass book. When preparing a bank reconciliation statement, all errors and omissions in the cash book as well as timing differences between the two statements are taken into consideration.
The accountant provided tax advice to a client on December 1, 20X3 but would not be paid until January 15, 20X4. Under accrual accounting, the accountant should record the revenue in 20X3 because accrual accounting records revenue in the period the service is provided, regardless of when payment is received. Accrual accounting attempts to record the financial effects of transactions in the period they occur rather than when cash is exchanged.
The document discusses bank reconciliation, which is the process of ensuring the bank statement balance matches the business's records. It explains items that may appear in only one record like deposits not cleared. The purpose is to identify and correct discrepancies by preparing a bank reconciliation statement that lists unpresented checks, uncredited deposits, and other adjustments to calculate the correct balance. Instructions are provided on updating records, identifying reconciling items, and preparing the final reconciliation statement to match the business and bank records.
Chapter 5 transactions that affect revenue, expenses, andIva Walton
- Wendy's International was founded by Dave Thomas in 1969 with its first restaurant in Columbus, Ohio called Wendy's Old Fashioned Hamburgers.
- Wendy's earns revenue primarily by selling meals to customers. Expenses for a Wendy's restaurant could include supplies, rent, utilities, payroll, and maintenance.
- The document discusses basic accounting concepts like temporary and permanent accounts, debit and credit rules for revenue, expense, and withdrawal accounts, and how to analyze business transactions that affect different types of accounts.
Factoring & Forfeiting
James Manufacturing, a small boat trailer manufacturer, was awarded a large contract but faced cash flow issues due to the long payment terms from the state. Through factoring, James received an advance of 80% on delivered trailers, providing working capital to complete the order on time. Forfeiting allowed Fox Fresh Exports in Zimbabwe to receive immediate payment in foreign currency less a discount by selling promissory notes from UK importer Tesco to a bank, improving cash flow. Both helped companies access working capital and meet delivery deadlines.
This document discusses various topics relating to financial assets, including cash, marketable securities, receivables, and notes receivable. It provides information on how these assets are valued for financial statements, cash management techniques, accounting for uncollectible accounts receivable, and calculating interest revenue for notes receivable. Worked examples are provided to illustrate estimating credit losses and recording interest earned on a short-term note receivable.
Money supply is determined by the central bank and commercial banking network. It impacts macroeconomic conditions and interest rates. There are four measures of money supply but M3, which includes time deposits and savings deposits, is most widely used. Factors like bank credit, government spending, and foreign exchange reserves can increase money supply. While central banks can print money, uncontrolled printing will devalue the currency. Commercial banks create credit through the deposit multiplier process, where an initial deposit can expand into multiple new deposits through a series of loans and redeposits, limited by reserve requirements.
The document explains how to understand debits and credits in bookkeeping. It defines debits and credits as entries on the left or right side of accounts. Debits increase asset and expense accounts, and credits increase liability, equity, and revenue accounts. The steps are to understand debits and credits, remember basic rules like assets increasing with debits, set up a basic balance sheet and ledger accounts, record transactions by increasing and decreasing appropriate accounts with debits and credits, update account balances, and ensure the books are balanced.
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
1. The document summarizes key concepts related to accounting for sales revenue, receivables, and cash including revenue recognition principles, credit card sales, sales discounts, sales returns and allowances, bad debts, and cash controls.
2. It also discusses calculating ratios like gross profit percentage, receivables turnover, average collection period, and preparing bank reconciliations.
3. Examples are provided of journal entries for credit card sales, sales discounts, sales returns, estimating bad debts expense, and reconciling cash accounts.
AC1220 ACCOUNTING I Lab 4.2
AC1220 Lab 4.2
Introduction
Jake’s Computer Sales and Repair has an accounts receivable balance of $6,520 as of May 31, 20x1. Jake maintains an aging-of-accounts schedule listing a time outstanding (or “age”) of the invoice amounts that make up each customer’s receivable balance.
Requirement 1
a. Compute the estimated uncollectible amount for each customer in the aging schedule. Enter amounts in the appropriate cells, rounding to the nearest dollar.
b. Compute the total estimated allowance for the uncollectible account balance. Enter the amount in the appropriate cell.
Uncollectible Accounts Schedule at May 31, 20x1
Customer Name
Account Number
1-30 Days
31-60 Days
61-90 Days
Over 90 Days
Totals
Atterbury
1001
$850
$250
-
-
$1,100
Smith
1002
1,320
2,900
$480
-
$4,700
Walten
1003
-
-
50
40
$90
Total
$2,170
$3,150
$530
$40
$6,520
Estimated percent uncollectible
x 2%
x 5%
x 10%
x 90%
Estimated allowance for uncollectible accounts
Requirement 2
a. Make the necessary journal entry to establish an allowance for the uncollectible accounts account. Use the target allowance for the uncollectible accounts balance computed in Requirement 1.
DATE
DETAILS
DEBIT
CREDIT
5/31/x1
b. Post the entry from Requirement 2a and account receivable balance to the following T-Accounts:
Uncollectible Account Expense
Allowance for Uncollectible Accounts
Accounts Receivable
c. Show the disclosure of net accounts receivable in the following partial balance sheet:
In the current assets section of the balance sheet:
Accounts Receivable, Net
Requirement 3
Jake is informed in writing that a customer, Walten, has filed for bankruptcy and will be unable to settle an account receivable of $90.
Make the journal entry necessary to write off this amount.
DATE
DETAILS
DEBIT
CREDIT
5/31/x1
Requirement 4
Jake receives notice from Walten’s attorney that Jake’s Computer Sales and Repair will receive $0.50 on the dollar of the $90 account receivable previously written off. A check for that amount is included.
Journalize the partial reinstatement and recovery of Walten’s account receivable.
DATE
DETAILS
DEBIT
CREDIT
5/31/x1
Requirement 5
Customer Smith’s account receivable balance of $480 is more than 60 days old. Jake and Smith agree to reclassify this amount as a note payable with a six-month maturity and a 15 percent annual interest rate.
Jake makes the following journal entry:
DATE
DETAILS
DEBIT
CREDIT
5/31/x1
Note Receivable
$480
Accounts Receivable
$480
To record 15% note receivable
Compute the interest and principle components of the payment that Smith will make on June 30, 20x1, on the note payable.
Hint: Principal x Interest Rate x Days/365 = Amount of Interest
Requirement 6
Requirement 6
Jake considers using the direct write-off method to account for uncollectible accounts. He would debit the uncollectible account expense a.
(1) The Allowance for Doubtful Accounts is a contra-asset account subtracted from accounts receivable on the balance sheet.
(2) The actual write-off entry does not reduce net receivables.
(3) The estimation error inherent in the allowance method is more acceptable than violating the matching principle with the direct write-off method.
Discounting, Factoring & Forfaiting in Financial ServicesKiruba Devi
This document provides information on discounting, factoring, and forfaiting. It defines discounting as the process of converting future values to present values. It describes different types of bill discounting such as sales bill discounting. Factoring is defined as the purchase of receivables by a financial organization called a factor. The document outlines the mechanics and types of factoring such as recourse and non-recourse factoring. Forfaiting is described as the purchase of export receivables without recourse to the exporter by a financial intermediary called a forfaiter. The essential requisites and mechanics of forfaiting transactions are also discussed.
This document discusses strategies for managing a firm's working capital, including accounts receivable, inventory, and cash. It covers establishing credit policies, analyzing customer creditworthiness, collecting accounts receivable, managing inventory levels, and investing idle cash. The goal is to minimize costs associated with carrying accounts receivable, inventory, and cash while maintaining sufficient liquidity to operate the business.
This document discusses receivable financing, which allows a company to raise funds using its accounts receivable. It describes pledge, assignment, and factoring of receivables. Pledging involves using receivables as collateral for a bank loan. The company retains collection rights but may need to remit funds to the bank. Accounting involves recording the loan and subsequent payments. Financial statements must disclose pledged receivables. Illustrations demonstrate journal entries for pledging receivables and repaying a loan.
Invoice finance provides businesses with early access to cash from their unpaid invoices. There are two main types: factoring involves the invoice financier collecting payment from customers, while invoice discounting requires the business to pursue customers for payment. While invoice finance can provide cash flow benefits, businesses should understand all associated costs and terms to avoid surprises. Compare Funding can help businesses find the most suitable invoice financing option.
This document provides examples of accounting entries for uncollectible accounts (bad debts) using both the direct write-off method and provision method. Under the direct write-off method, uncollectible accounts are directly expensed against accounts receivable when deemed uncollectible. The provision method estimates bad debts at the end of each period by debiting bad debt expense and crediting an allowance account to match expenses with revenues. When debts are written off, the allowance is reduced and receivables are credited.
Commercial banks have the ability to create credit through the process of lending deposits. When a bank grants a loan, it credits the borrower's account, creating new deposits. These derivative deposits can then be lent out again, resulting in multiple expansion of credit in the banking system. The initial deposit of Rs. 1,000 in Bank A resulted in total bank credit of Rs. 1,952 across three banks, demonstrating how one primary deposit can multiply into much higher credit amounts. However, banks' ability to create credit is limited by reserve requirements, economic conditions, and other factors controlled by the central bank.
This document provides an overview of the CIMA C02 Fundamentals of Financial Accounting exam, including key terms and concepts. It discusses topics like trading accounts, markups, gross profit calculations, control accounts, and accounting for non-profit organizations. Sample exam questions are provided covering receipts and payments accounts, annual subscription accounts, and the regulatory framework for financial accounting. Key terms are highlighted that indicate certain accounting treatments should be used for exam questions involving topics like trading, debtors, creditors, and non-profit organizations.
Accounting for Receivables Lecture PPT.pptxjuweldba
a. Total estimated uncollectible:
March sales (1-30 days) - 2% of 65,000 = 1,300
February sales (31-60 days) - 5% of 17,600 = 880
January sales (61-90 days) - 30% of 8,500 = 2,550
Prior to January (over 90 days) - 50% of 7,000 = 3,500
Total estimated uncollectible = 1,300 + 880 + 2,550 + 3,500 = 8,230
b. Adjusting entry at March 31:
Bad debts expense Dr. 8,230
Allowance for doubtful accounts Cr. 8,230
(To record estimated
A bank reconciliation statement is prepared to reconcile the differences between the balances as per the cash book and as per the bank statement/pass book. It identifies timing differences in recording transactions as well as errors in the cash book or pass book. When preparing a bank reconciliation statement, all errors and omissions in the cash book as well as timing differences between the two statements are taken into consideration.
The accountant provided tax advice to a client on December 1, 20X3 but would not be paid until January 15, 20X4. Under accrual accounting, the accountant should record the revenue in 20X3 because accrual accounting records revenue in the period the service is provided, regardless of when payment is received. Accrual accounting attempts to record the financial effects of transactions in the period they occur rather than when cash is exchanged.
The document discusses bank reconciliation, which is the process of ensuring the bank statement balance matches the business's records. It explains items that may appear in only one record like deposits not cleared. The purpose is to identify and correct discrepancies by preparing a bank reconciliation statement that lists unpresented checks, uncredited deposits, and other adjustments to calculate the correct balance. Instructions are provided on updating records, identifying reconciling items, and preparing the final reconciliation statement to match the business and bank records.
Chapter 5 transactions that affect revenue, expenses, andIva Walton
- Wendy's International was founded by Dave Thomas in 1969 with its first restaurant in Columbus, Ohio called Wendy's Old Fashioned Hamburgers.
- Wendy's earns revenue primarily by selling meals to customers. Expenses for a Wendy's restaurant could include supplies, rent, utilities, payroll, and maintenance.
- The document discusses basic accounting concepts like temporary and permanent accounts, debit and credit rules for revenue, expense, and withdrawal accounts, and how to analyze business transactions that affect different types of accounts.
Factoring & Forfeiting
James Manufacturing, a small boat trailer manufacturer, was awarded a large contract but faced cash flow issues due to the long payment terms from the state. Through factoring, James received an advance of 80% on delivered trailers, providing working capital to complete the order on time. Forfeiting allowed Fox Fresh Exports in Zimbabwe to receive immediate payment in foreign currency less a discount by selling promissory notes from UK importer Tesco to a bank, improving cash flow. Both helped companies access working capital and meet delivery deadlines.
This document discusses various topics relating to financial assets, including cash, marketable securities, receivables, and notes receivable. It provides information on how these assets are valued for financial statements, cash management techniques, accounting for uncollectible accounts receivable, and calculating interest revenue for notes receivable. Worked examples are provided to illustrate estimating credit losses and recording interest earned on a short-term note receivable.
Money supply is determined by the central bank and commercial banking network. It impacts macroeconomic conditions and interest rates. There are four measures of money supply but M3, which includes time deposits and savings deposits, is most widely used. Factors like bank credit, government spending, and foreign exchange reserves can increase money supply. While central banks can print money, uncontrolled printing will devalue the currency. Commercial banks create credit through the deposit multiplier process, where an initial deposit can expand into multiple new deposits through a series of loans and redeposits, limited by reserve requirements.
The document explains how to understand debits and credits in bookkeeping. It defines debits and credits as entries on the left or right side of accounts. Debits increase asset and expense accounts, and credits increase liability, equity, and revenue accounts. The steps are to understand debits and credits, remember basic rules like assets increasing with debits, set up a basic balance sheet and ledger accounts, record transactions by increasing and decreasing appropriate accounts with debits and credits, update account balances, and ensure the books are balanced.
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This PowerPoint compilation offers a comprehensive overview of 20 leading innovation management frameworks and methodologies, selected for their broad applicability across various industries and organizational contexts. These frameworks are valuable resources for a wide range of users, including business professionals, educators, and consultants.
Each framework is presented with visually engaging diagrams and templates, ensuring the content is both informative and appealing. While this compilation is thorough, please note that the slides are intended as supplementary resources and may not be sufficient for standalone instructional purposes.
This compilation is ideal for anyone looking to enhance their understanding of innovation management and drive meaningful change within their organization. Whether you aim to improve product development processes, enhance customer experiences, or drive digital transformation, these frameworks offer valuable insights and tools to help you achieve your goals.
INCLUDED FRAMEWORKS/MODELS:
1. Stanford’s Design Thinking
2. IDEO’s Human-Centered Design
3. Strategyzer’s Business Model Innovation
4. Lean Startup Methodology
5. Agile Innovation Framework
6. Doblin’s Ten Types of Innovation
7. McKinsey’s Three Horizons of Growth
8. Customer Journey Map
9. Christensen’s Disruptive Innovation Theory
10. Blue Ocean Strategy
11. Strategyn’s Jobs-To-Be-Done (JTBD) Framework with Job Map
12. Design Sprint Framework
13. The Double Diamond
14. Lean Six Sigma DMAIC
15. TRIZ Problem-Solving Framework
16. Edward de Bono’s Six Thinking Hats
17. Stage-Gate Model
18. Toyota’s Six Steps of Kaizen
19. Microsoft’s Digital Transformation Framework
20. Design for Six Sigma (DFSS)
To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations
Part 2 Deep Dive: Navigating the 2024 Slowdownjeffkluth1
Introduction
The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
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Know what your zodiac sign says about your taste in food! Explore how the 12 zodiac signs influence your culinary preferences with insights from MyPandit. Dive into astrology and flavors!
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
Easily Verify Compliance and Security with Binance KYCAny kyc Account
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Digital Marketing with a Focus on Sustainabilitysssourabhsharma
Digital Marketing best practices including influencer marketing, content creators, and omnichannel marketing for Sustainable Brands at the Sustainable Cosmetics Summit 2024 in New York
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2. Accounting for Factoring - Purpose
The purpose of this presentation is to provide a simple “how to”
guide to accounting for factoring arrangements.
• Many companies that may be tight on cash choose to factor
their accounts receivable in order to bring in cash more
quickly.
• Many companies are challenged by how to record these
complex entries.
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Scenario Assumptions
Let’s assume that XYZ Company enters into a factoring arrangement with a bank or some
kind of financial institution that we’ll call “First McLean Bank.”
First McLean Bank offers to advance 85% of the valid accounts receivables.
XYZ factors $10,000 of invoices with the Bank
The factoring fee is 3%
Funds transfer fee is $20 from First Mclean Bank to XYX’s commercial checking account.
Assume that the bank transfer fees are netted against the advance received.
Interest on outstanding advances is calculated at 2% monthly.
Receivables are assigned to First McLean Bank. That means customers pay First Mclean, not XYX.
* We must create an account for “Factoring advances” in our Chart of Accounts. This can be done within the Current
Asset section of the balance sheet as a “contra asset” or it can be created within the liability section as a current liability.
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Initial Credit Sale
Factoring only happens when there are credit sales and
collection against accounts receivables is expected.
Assuming XYX invoiced customers for $10,000 on credit, we
would have initially recorded the following entry:
Debit Accounts Receivable $10,000
Credit Sales $10,000
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Step 1: Factoring Advance
XYZ Co. decides to factor the $10,000 of invoices with First Mclean Bank. The advance rate is 85%,
the factoring fee is 3%, and the fee for the bank transfer (i.e. wire or ACH) is $20. The entry to record
the cash received and the fees is:
Debit Cash $8,480 => (85% * $10,000 less the $20 bank
fee)
Debit Factoring Fee $ 300 => ( 3% * $10,000)
Debit Bank Transfer fee $ 20
Credit Factoring Advance $8,800
* Notice that Accounts Receivable is not affected. So what happens to the $1,200 difference between
the value of the invoices factored and the total advance? That is the “escrow reserve” held by the
factoring company. First Mclean Bank’s books will show a “reserve account for $1,200. We can
calculate the cumulative reserve in XYX’s books by calculating the difference between total factored
Accounts Receivable ($10,000) and the Factoring Advance ($8,800), or $1,200.
6. Factoring Advance- Recording of Cash
It’s Important to note that the Advance is not a payment of
receivables. It is a loan. Accounts Receivable is not affected
by the factoring advance.
Do not post factoring advances against outstanding accounts
receivable!
7. Step 2 – Recording of Interest Expense
Most factoring agreements include periodic interest charges
calculated upon outstanding factoring advances. Let’s assume that
after one month, the entire balance of $10,000 remains outstanding.
First Mclean Bank charges 2% monthly interest on outstanding
advances. In a previous slide (“Step 1”) we determined the factoring
advances was $8,800. The journal entry would be:
Debit Interest expense $176 => (2% * $8,800)
Credit Factoring Advance account $176
8. Step 3 Payment of Factored Receivables
Let’s assume now that the customer(s) pay the $10,000 balance
in full. Since the receivables were assigned to the factoring
company, the $10,000 cash is received by First Mclean Bank,
not XYZ. Cash at XYZ company is unaffected! The offset to
receivables is a reduction in the advance! The entry is
Factoring Advance $10,000
Accounts Receivable $10,000
9. Step 4 Return of Escrow Reserve
Now assume that after one month, the entire $10,000 accounts receivable balance is
paid by customers to the factoring company. The factoring advance is now $8,976
($8,800 initial advance + $176 1st month’s interest). When the receivables were paid, we
debited a factoring liability account for $10,000. After customer payment, the reserve
balance is negative $1,024 ($8,976-$10,000). That means that the First McLean Bank
now owes XYZ Co $1,024! First Mclean Bank will now zero out the “escrow reserve” and
record the balance of funds received in a “cash reserve” account. The “escrow account”
is now $0.
So how does the Factoring Advance account in XYX’s books return to 0? It happens
when First Mclean Bank returns the funds to XYZ Co. Remember, there will likely be
another bank fee for the funds transfer. The entry for the return of reserve funds is:
Debit Cash $1,004
Debit Bank Transfer fee $ 20
Credit Factoring Advance $1,024
10. Summary
Now we are back to where we started, with the return of the reserve:
XYZ’s factoring advance account is =>$0
The Bank’s escrow reserve account is = > $0
The Bank’s cash reserve account is => $0
With each new factoring of receivables, we restart the process
and repeat steps 1-4.
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END
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