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What affect would Accounts Receivable have on a business vs sales revenues?
Wiki User
∙ 12y ago
It is fairly easy to "cook the books" by recording sales revenue offset by increasing Accounts Receivable. Eventually this is found out when the "customers" never pay their amounts "receivable".
Wiki User
∙ 12y ago
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Why paying off accounts payable and collecting accounts receivable do not affect net income?
i have the same question!
Receiving payment of a portion of accounts receivable will?
Correct Answer: not affect total assets.
Can a business transaction affect at least two accounts?
yes
A collection of account receivable will affect what account?
A collection for an account receivable will affect two accounts. Cash and the Account Receivable that it is related to.For example, a customer has purchased a computer on account for $1500 and they pay you $500 towards the balance, the two accounts will beCash (db) $500Account Rec-*customer name - (cr) $500Not only did you receive cash, which increases your cash (debit) but the customer paid toward his account and it reduces the amount he owes (credit).
How does rendering of services on account affect the accounting equation?
Rendering services on account increases accounts receivable, as well as equity (retained earnings) For example, a company has provided cleaning services for an amount of $200; the customer is allowed a three week credit assets = liabilities + equity accounts receivable (assets): increases with +200 retained earnings (equity): increases with + 200 +200 = +200
Why paying off accounts payable and collecting accounts receivable do not affect net income?
i have the same question!
Receiving payment of a portion of accounts receivable will?
Correct Answer: not affect total assets.
Why are accounts receivable a financial concern of the firm?
Liquidity refers to the ability of a firm to change its assets to cash. Being an asset, the ability for receivables to pay its debts to the firm will affect the asset's ability to become liquid. A business that collects its accounts receivable in an average of 20 days generally has more cash on hand than a business that requires 45 days.
Can a business transaction affect at least two accounts?
yes
A collection of account receivable will affect what account?
A collection for an account receivable will affect two accounts. Cash and the Account Receivable that it is related to.For example, a customer has purchased a computer on account for $1500 and they pay you $500 towards the balance, the two accounts will beCash (db) $500Account Rec-*customer name - (cr) $500Not only did you receive cash, which increases your cash (debit) but the customer paid toward his account and it reduces the amount he owes (credit).
How does rendering of services on account affect the accounting equation?
Rendering services on account increases accounts receivable, as well as equity (retained earnings) For example, a company has provided cleaning services for an amount of $200; the customer is allowed a three week credit assets = liabilities + equity accounts receivable (assets): increases with +200 retained earnings (equity): increases with + 200 +200 = +200
How does account receivable affect net income?
Account receivable is a balance sheet item shown under current assets on the asset side, having a debit balance. It doesn't have anything to do with net income as accounts receivable is never shown in the trading profit and loss account. Only credit sales relating to such receivables during the current year forms part of the credit side of profit and loss and nit the account receivable itself.
How does sales affect the accounting equation?
acoounts receivable and capital
How does buying equipment for cash affect which accounts?
Sometimes business equipment can be bought for cash at a greatly reduced price. This helps keep expenses down in a business if less money is going out for equipment.
How would a sale of 200 of inventory on credit affect the balance sheet if the cost of the inventory sold was 80?
it will create the accounts receivable of 200 while reduce the value of inventory with 80 as well as shows the profit of 120 in equity side of balance sheet.
When cash is received from sales what do it do to owner's equity?
This depends on when the cash was received. If the cash was received at the time of sale, then the owner's equity will increase. This is because revenue (and subsequently owner's equity) is increased at the time it is earned. If, on the other hand, the cash is received as a result of a collection on Accounts Receivable from a previous sale, this will have no affect on owner's equity. This is because the revenue was recognized as soon as the receivable was recorded (i.e., the revenue was earned).
Does a company credit when the company is the accounts payable and the card was issued by the company for business expenses affect your personal credit score?
If none of your legal information is attached to the card (SSN for example) then the answer is No it will not affect your presonal credit score.
