Question 7.11

b. When are journal entries required in the operation of a petty cash fund? 7.9 What is the difference between an account receivable and a note receivable? 7.10 Soo Eng cannot understand why the net amount of accounts receivable does not decrease when an uncollectable account is written off under the allowance method Clarify this point for Soo Eng. 7.11 Simona Ltd's operating cycle is 1 year. How would the following receivables be classified on the statement of financial position? a. Trade debtor account of $500 000, of which 70% is due within 1 month with the balance due in 18 months. b. A 90-day promissory note. 7.12 Jayne's Gourmet Delivery is in its second year of operation. All sales are on credit and the business has a credit term of 30 days. You have just worked out that the receivables turnover is 8 times this year. Comment on the effectiveness of the collection policy 480