of it deposits (e.g., compensating balances and funds earmarked for a dated checks, IOUs, postage stamps, and certificates of deposit. CATION AND VALUATION OF RECEIVABLES: Accounts (e - Cash excludes restricted II. CLASSIFI Receivable (also called trade receivables) arise from sale of (not requiring a signed contract) and with no interest. Initial revenue. The terms of the sale affect this in and with no interest. Initially recorded at the amount of sales goods or services on account itial measurement. iscounts (also called Sales Discounts (also called cash discounts): are given as an timely payment payment is received within 10 d accounts receivable should be recorded at the net amount, referred to as the net m gross method is popular and acceptable, but theoretically weak. cash discounts): are given as an incentive to credit customers for ays, otherwise the entire amount is due within 45 days). Sales and 1. e.g. 2/10 n/45 means credit customers are allowed a 2 percent discount if EXHIBIT 7-2: SALES DISCOUNTS on December 2, 2011, Beethoven Inc. sold goods on account totaling $2,8e0. Half were sold to Allegro Company and half were sold to Adagio Corporation. The terns are 2/10, net 45. Allegro paid on December 6, while Adagio waited until January 5, 2012. Beethoven has a calendar year, Prepare all necessary journal entries for Beethoven related to these sales under the net method and the gross method, including any adjusting entries that might be necessary at December 31, 2011. NET METHOD GROSS METHOD