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Chapter 2
Accounting for Receivables
Critical Thinking
CT-1 (
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You are the Chief Financial Officer for Stanton Feery and Company. Mr. Stanton’s friend, Shad
Baxtor, is starting up a new company, and needs some advice on accounts receivable and bad
debt accounting practices. Mr. Stanton has asked you to meet with Mr. Baxtor and answer a
few questions. He hands you a list of things that Shad Baxtor wants clarified.
Required
Answer the following questions for Shad Baxtor.
a) What are accounts receivable?
b) What are bad debts?
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