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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

You and your spouse have separate charge accounts at a local department store. When you tried to use your card last week, you were told that you were over your credit limit. This puzzled you because you had paid the entire account balance several weeks ago. When the monthly statements arrived yesterday, the error was clear. The store had credited your payment to your spouse’s account.

Your account was treated as over the limit, and the store charged you interest on the unpaid balance. You suspect that part of the problem is that you and your spouse use the same last name (Morales) and have similar first names (Carmen and Carmelo).

Write a letter to the store requesting correction of your accounts and suggesting a way to identify your accounts so that this error does not happen again.

To determine

Draft a letter to the store manager explaining the error that occurred in the charge accounts, and recommending the ways to tackle it.

Explanation

Account receivable: The amount of money to be received by a company for the sale of goods and services to the customers, is referred to as account receivable.

Draft a letter to the store manager explaining the error that occurred in the charge accounts, and recommending the ways to tackle it.

Dear Store Manager,

Despite the bills being paid the customer, the charge accounts had insufficient credit limit, and the interest being charged for the unpaid balance. CNM, the customer had paid the bills several weeks ago. But the customer, CNM had to suffer the loss of availing the credit facilities of the store...

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