17、iscounts not taken as interest revenue, because they are viewed as compensation to the seller for allowing the buyer to defer payment.Question 7-8When returns are material and a company can make reasonable estimates of future returns, an allowance for sales returns is established. At a financial rep 。

18、orting date, this provides an estimate of the amount of future returns for prior sales, and involves a debit to sales returns and a credit to allowance for sales returns for the estimated amount. Allowance for sales returns is a contra account to accounts receivable. When returns actually occur in t 。

19、he future reporting period, the allowance for sales returns is debited.Question 7-9Even when specific customer accounts haven t been proven unctohlleectible byend of the reporting period, bad debt expense properly should be matched with sales revenue on the income statement for that period. Likewise 。

20、, since it s not eall accounts receivable will be collected, the balance sheet should report only the expectednet realizable valueof that asset. So, to record the bad debt expense and the related reduction of accounts receivable when the amount hasn t been determinestimate is needed. In an adjusting 。

21、 entry, we record bad debt expense and reduce accounts receivable for an estimate of the amount that eventually will prove uncollectible.If uncollectible accounts are immaterial or not anticipated, or it s notreliably estimate uncollectible accounts, an allowance for uncollectible accounts is not ap 。

22、propriate. In these few cases, any bad debts that do arise simply are written off as bad debt expense at the time they prove uncollectible.Question 7-10The income statement approach to estimating bad debts determines bad debt expensedirectly by relating uncollectible amounts to credit sales. The bal 。

23、ance sheet approach to estimating future bad debts indirectly determines bad debt expense by estimating the net realizable value for accounts receivable that exist at the end of the period. In other words, the allowance for uncollectible accounts at the end of the period is estimated and then bad de 。

24、bt expense is determined by adjusting the allowance account to reflect net realizable value.Question 7-11A company has to separately disclose trade receivables and receivables from related parties under U.S. GAAP, but not under IFRS.Question 7-12The assignment of all accounts receivable in general a 。

25、s collateral for debt requires no special accounting treatment other than note disclosure of the agreement.Question 7-13The accounting treatment of receivables factored with recourse depends on whether certain criteria are met. If the criteria are met, the factoring is accounted for as a sale. If th 。

26、ey are not met, the factoring is accounted for as a loan. In addition, note disclosure may be required. Accounts receivable factored without recourse are accounted for as thesale of an asset. The difference between the book value and the fair value of proceeds received is recognized as a gain or a l 。

27、oss.Question 7-14U.S. GAAP focuses on whether control of assets has shifted from the transferor to the transferee. In contrast, IFRS focuses on whether the company has transferred “ substantiallyall of the risks and rewards of ownership, a”s well as whether the company has transferred control. Under 。

28、 IFRS:If the company transfers substantially all of the risks and rewards of ownership, the transfer is treated as a sale.If the company retains substantially all of the risks and rewards of ownership, the transfer is treated as a secured borrowing.If neither conditions 1 or 2 hold, the company acco 。

29、unts for the transaction as a sale if it has transferred control, and as a secured borrowing if it has retained control.Question 7-15When a note is discounted, a financial institution, usually a bank, accepts the note and gives the seller cash equal to the maturity value of the note reduced by a dis 。

30、count. The discount is computed by applying a discount rate to the maturity value and represents the financing fee the bank charges for the transaction.The four-step process used to account for a discounted note receivable is as follows:1. Accrue any interest revenue earned since the last payment da 。

31、te (or date of the note).2. Compute the maturity value.3. Subtract the discount the bank requires (discount rate times maturity value times the remaining length of time from date of discounting to maturity date) from the maturity value to compute the proceeds to be received from the bank (maturity v 。

32、alue less discount).4. Compute the difference between the proceeds and the book value of the note and related interest receivable. The treatment of the difference will depend on whether the discounting is accounted for as a sale or as a loan. If it s a sale the difference is recorded as a loss or ga 。

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标题：IntermediateAccounting|IntermediateAccounting教科书上习题答案(byJDavidSpiceland)( 二 )