i have the same question!
Correct Answer: not affect total assets.
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".
Paying off accounts payable not affect net income because it is charged to income statement already at time of purchases now it is just the payment of cash which charge cash only.
Making a payment on an account payable will decrease cash. At the same time it will also decrease your liability for that same amount.
It effects in working capital changes in cash flow
Correct Answer: not affect total assets.
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".
Paying off accounts payable not affect net income because it is charged to income statement already at time of purchases now it is just the payment of cash which charge cash only.
Making a payment on an account payable will decrease cash. At the same time it will also decrease your liability for that same amount.
It effects in working capital changes in cash flow
Cash dividend affects the cash and remaining items does not have any effect on cash like depreciation or accounts payable.
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).
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.
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.
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
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.
acoounts receivable and capital