Accounts receivable generally refers to the right of an enterprise to obtain cash, goods or services in the future. It is all kinds of creditor's rights in the daily production and operation of enterprises, and it is the right for enterprises to collect money from customers for selling goods or providing services on credit. Confirmation is based on written documents such as commercial credit and purchase and sale contracts, commodity outbound orders, invoices and waybills. Under normal circumstances, according to the historical cost pricing principle, accounts receivable should be accounted according to the actual transaction price, mainly including invoice sales price, value-added tax and prepaid transportation and miscellaneous fees, and cash discount should be considered.
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The final unrecoverable amount in accounts receivable is called bad debt, and the resulting loss is called bad debt loss. Under normal circumstances, only accounts receivable that are proved irrecoverable are recognized as bad debts. There are two ways to deal with bad debt losses in accounting: direct write-off method and allowance method. At present, China's enterprise accounting system stipulates that enterprises should use the allowance method to calculate bad debts. The allowance method must first estimate the bad debt loss on schedule. In accounting practice, there are generally three methods to estimate the loss of bad debts on schedule: credit sales percentage method, accounts receivable balance percentage method and aging analysis method.
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