Accounting for Receivables and Payables - Chapter 12

Jul 17, 2026

Uploaded by Miles

Chapter 12 provides a structured learning guide for accounting for receivables, emphasizing hospitality-industry relevance and the practical management of credit, maturity dates, and cash flow. Learning objectives cover identifying types of receivables, recognition in the accounts, valuation methods and bases, and journal entries related to disposition and credit policies. Content reviews core concepts of liabilities and maturity, then focuses on accounts receivable, distinguishing accounts, notes, and other receivables and outlining the three key accounting issues: recognizing, valuing, and disposing.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages33

Reading Time1 h 23 min

AccessFree to download

ACCOUNTING FOR RECEIVABLESANDTHEPAIATBOS • Understand Concepts for Review ❑ | • Read Feature Story | ❑ | | | --- | --- | --- | | • Scan Study Objectives | ❑ | | | • Read Preview | ❑ | | | • Read text and answer Before You Go On
p. 356–357 ❑ p. 359–360 ❑ p. 366 ❑ | | | | • Work Demonstration Problem | | ❑ | | • Review Summary of Study Objectives | | ❑ | | • Complete Assignments | | ❑ | 7 CONCEPTS FOR REVIEW Before studying this chapter, you should know or, if necessary, review: a. How to record sales transactions. (Ch. 8, pp. 243–245) b. Why adjusting entries are made. (Ch. 4, pp. 107–108) c. How to compute interest. (Ch. 4, p. 117) ✓THE NAVIGATOR | FE A T U R E S T O R Y | | | | | --- | --- | --- | --- | | Financing His Dreams
What would you do if you had a great idea for a new product but couldn’t come up with the cash to get the business off the ground? Small businesses often can’t attract investors, nor can they obtain traditional debt financing through bank loans or bond issuances. Instead, they often resort to unusual, and costly, forms of nontraditional financing.
Such was the case for Wilbert Murdock. Murdock grew up in a New York housing project and always had great ambitions. This ambitious spirit led him into some business ventures that failed: a medical diagnostic tool, a device to eliminate carpal tunnel syndrome, custom sneakers, anda device to keep people from falling asleep while driving.
His latest idea was computerized golf clubs that analyze a golfer’sswing and provide immediate feedback. Murdock saw great potential in the idea: Many golfers are willing to shell out considerable sums of money for devices that might improve their game. But Murdock had | no cash to develop his product, and banks and other lenders had shied away. Rather than give up, Murdock resorted to credit cards—in a
big way. He quickly owed $25,000 to credit-card companies.
While funding a business
with credit cards might sound unusual, it isn’t. A recent study found that one-third of businesses with fewer than 20 employees financed at least part of their operations with credit cards. As Murdock explained, credit cards are an appealing way to finance a start-up because“credit-card companies don’t care how the money is spent.” But they do care how they are paid. And so Murdock faced high interest chargesand a barrage of credit-card collection letters.
Murdock’s debt forced him to sacrifice nearly everything in order to keep his business afloat. His car | stopped running, he barely had enough money to buy food, and he lived and worked out of a dimly lit apartment in his mother’s basement. Through it all he tried to maintain a positive spirit, joking that if he becomes successful, he might someday get to appear in an American Express commercial. | | | | | SOURCE: Rodney Ho,“Banking on Plastic: To Finance a Dream, Many Entrepreneurs Binge on Credit Cards,” Wall Street Journal, March 9, 1998, p. A1 . | ✓THE

Jul 17, 2026

Uploaded by Miles