Essays on Bad Debt

Significance of Accounts Receivable Practice

The most primary element for the success of a business is the way in which the systems of accounts receivable management, collections and billing are maintained. Often, this type of management collectively is known as the system of collections management. The main key to the success of this system is to manage it diligently. It is because having large amount of customers is not enough to run a successful business; revenue needs to be collected from these customers (Clarke, 2016). There are a number of reasons for a business setting up the accounts receivable in a given organization. When ...

The credit policy of a business should be customer friendly and should provide adequate time to the customer for the payment for purchase or service. To successfully manage credit, a company needs to place importance on new customers and not only focus on the old customers. It will be important to reach out to new customers who will increase their reach as well as revenue, credit management enables the company to improve on their policies and regularize the cycle of receivables. The most important part about credit management is the collection and unpaid collection. A company needs to maintain ...

Discuss how the principles of internal control apply to cash receipts. 

The principles of internal control apply to cash receipts because of the need to monitor and control it. Since cash receipts are one of the most important assets of a company, it is essential that there be policies and formal procedures to monitor and control it. Several principles of internal control are applicable to cash receipts such as assigning a person or persons responsible for the cash receipts and the maintenance of its records, making sure that the person/s assigned to the custody of cash receipts is different from those who keep the accounting records. Moreover, technological controls like cash registers, ...

- Cash Equivalents The company has entered into arrangements with its partnering distribution clients that designated cash accounts to UTIW from receivables from the end clients of its distribution partners. These cash accounts are identified as the company as “cash equivalents”. As of 2013, the company’s cash equivalents were reported as US$ 27.6 million as of January 31, 2013 and US# 37.4 million as of January 31, 2012. UTIW often acts as a customs broker. When the company does this act in behalf of its clients, it pays in advance for customs duties and taxes. These payments ...

Introduction

Entities of health care recognize revenue for which a little portion of the total amount is billable or billed or the final collection is not assured reasonably at the time the services are rendered. There have been concerns raised by the constituents that these kind of accounting practices lead to gross-up revenue for unexpected amounts to be collected in the end. To add to it, due to the fact that entities of health care make their own decisions as far as bad debts and adjustment to revenues is concerned, the decisions are different from one another and it is not ...

What skills credit managers possess in order to manage the credit function efficiently?

Credit Management:Credit management is the process of collecting and controlling payments from the customers. Credit management is one of the functions of the banks or companies to control credit policies, to improve the revenues and reduce financial risks (Burt, 2004). A good credit management system is an essential part of an organisation, as it reduces the amount of capital tied up with the debtors and minimise the company’s exposure to the bad debts and doubtful debts, it is also important when considering the cash flow, as it is profitable for the company, and also helps the business to ...

Part A: Journal Entries to record accounting transactions

1. On December 31st the company sells on credit $5,000 of goods which had been bought a month previously at a cost of $3,500:

Debtors A/cDr5000

Cost of Goods Sold.Dr..3500 2. On December 31st the company sells an unwanted machine for $1,500. The machine was bought at the beginning of 2012 for $8,200 and was expected to be used for three years after which its value had been forecast to be $1,000.

Cash A/c.Dr 1500

Depreciation of Machinery A/c..Dr 7200 3. On January 2nd the company paid $500 by check for a three year buildings insurance policy. Insurance Premium ...

Lesson 7: The Budget Process

Lesson 8: Who Pays for Resident Care? Lesson 9: Inventories and Purchasing Lesson 7: The Budget Process - Describe the budget development process for an actual nursing facility - Nature of budget process Modern approaches require that small hospitals’ budgets reflect statistical; operating; capital and cash financial statements. Hospitals prepare their budgets based on anticipated income from patients through private insurance; Medicare/Medicaid. The process involves a top down’ ‘bottom up’ approach. The top down is the first step whereby team leaders/ supervisors set their profitability margin for the coming year. Once this aspect of the ...

- Balance Sheet of the Company The balance sheet of “The Home Depot” has been made with the accounting standard of Generally Accepted Accounting Principles (GAAP) and all of the items incurring in the balance sheet has been made with the same provision. The balance sheets of the year 2013 are published for the company and all the figures which have been used in the financial statement are actively confirmed by the auditors of the company in total. However, there are certain accounts that needed to be re-check and re-signs as well, which predominantly re current ration, debt ...

UNIVERSAL HEALTH SERVICES

Company Overview Universal Health Services, Inc. is America’s fifth largest hospital operator as well as the largest publicly-traded psychiatric and substance abuse facility operator. It owns and operates 23 acute care hospitals, and 197 behavioral health centers; it has also acquired Ascend Health Corporation in October 2012. The various forms of services that the hospitals provide include specialty and general surgery, internal medicine, obstetrics, radiology, oncology, pediatric services, pharmacy services and behavioral health services. All the capital resources that are required in the facilities are provided by the company itself along with other resources like the information ...

A. Identify the Facts and All Stakeholder Groups Likely to be Affected

Andrew Yo is a relevant part of Asia Telecom’s financial management and accounting team. Asia Telecom on the other hand is a large-scale telecommunications company whose main sources of income involve the provision of telecommunications services to a wide array of clients such as American Express, General Electric and IBM, and LDDS or Long Distance Discount Services. The company never really had any major problems dealing with large-scale corporations that are in need of telecommunications products and services such as the ones required above because more often than not, the transactions are done directly or non-overseas. This way, the management ...

Business finance and accounting is central to any business operation. While business finance provides the center for operation and management, accounting simply provides an historical background of the performance. Organizations rely on different methods of business finance and accounting to manage their business. However, most of financial reporting largely depends on the classification of the business as defined by its formation and its operations. The classification of business includes corporate, partnership, sole proprietorship, governmental organization or Nongovernmental organization commonly referred to as NGOs. All these operations rely on the balance sheet to indicate the present state of the organization ...

Question one

Many firms with ambitions of increasing their market share may offer goods and services on credit. Some of the customers offered credit may not settle their accounts. This results to bad debts and must be accounted for in company’s books of account. There are two ways of accounting for bad debts i.e direct write off method and allowance method. In direct write off method bad debts are recognized only when the company is sure that the customer will never settle his or her account i.e. the debt is uncollectable. To account for the bad debt the company accountant ...

The following paper discusses the decline of HSBC in detail and what were the major causes for it. The subprime mortgages, the main cause of financial crisis that hit not just USA but the entire globe, has been discussed in depth. The paper also mentions some of the policies that are now adopted by HDFC to combat bad debt and to ensure it is not repeated again. In the race to gain more customer base, huge financial corporation’s overlooked many key factors which when cumulated, resulted in the financial crisis of 2007.

Introduction

The global recession that affected the ...

As a matter of fact, financial occurrences happen all through the year. In most cases, these financial occurrences are recorded in books of accounts, in various ways depending on their nature. Notably, the recordings are first made in journal entries which mark the first step in financial analysis. An example of financial entries that are made in accounting is the adjusting entries. Arguably, adjusting entries are associated with income statement accounts as well as balance sheet accounts, (Loren, John & Jefferson, 2009).

Importance of adjusting entries

In this context, adjusting entries can be defined as journal entries that are usually made when an accounting ...