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Trade Receivables - Coggle Diagram
Trade Receivables
Allowance for impairment loss on TR
Double-entry
Decrease
Dr Allowance for impairment of TR Cr Impairment loss on TR
Increase
Dr Impairment loss on TR Cr Allowance for impairment of TR
Adjustments
Increase
Profit increase
Current asset increase
Other expense decrease
Increase
Profit decrease
Current asset decrease
Other expense increase
Estimated percentage(%) x Ending TR balance ($) = Allowance for impairment of TR
Decision
Non-accounting infrmation
Economic outlook
Reputation of customers
Specific industry outlook
New customers' history of repayment
Accounting information
No. of days TR are overdue
Existing customers' history of repayment
Credit terms & cash discount
Rate of TR turnover
TR balance
TR collection period
Double-entry
Collection
Dr Cash at bank / Cash in hand Cr Trade Receivables
Credit sale
Dr Trade Receivables Cr Sales Revenue / Service fee revenue