Accounts Receivable

When amounts owed to a business on a credit basis are classified as current assets, they are typically recorded as accounts receivable. This indicates that the business expects to receive payment within a year, making them liquid assets that can be converted to cash relatively quickly. Proper management of accounts receivable is crucial for maintaining cash flow and ensuring the financial health of the business.

Instead of waiting 30, 60, or 90 days or greater to be paid by your clients, you can get instant cash flow on your accounts receivables. In turn, your accelerated cash flow can be used to improve your business’ credit score, gain increased purchasing strength, and enhance manufacturing and sales.

Currents assets are assets that can quickly be turned into cash, therefore account receivable is because debtors can pay off their debt or the company can factor it and Property and equipment are difficult to turn into cash as you first have to find the suitable buyer and reconsider for sales

It is possible to conduct the research process in a non-sequential manner.

the schedule of accounts receivable shows

June 8

A ) Receipts are sent monthly. B) Credit reports are sent monthly.

C) Statements of the amount due are sent monthly.

D) Sales figures are sent monthly.

Should be C) Statements of the amount due are sent monthly.

Accounts payable

To post an increase in an asset, you would debit the asset account, reflecting its rise in value. Simultaneously, to record an increase in equity, you would credit an equity account, such as retained earnings or contributed capital. This dual entry maintains the accounting equation (Assets = Liabilities + Equity) and ensures that the financial statements remain balanced. For example, if a company receives cash from an owner, it would debit Cash (asset) and credit Owner’s Equity (equity).

You as the business owner decide as long as terms are clearly spelled out for customers, net10, net15, or net30. 15 is customary (15 days to pay)

No, Unearned Revenue is revenue that the person/company has received from the customer but has not yet fulfilled the commitment that they are obligated to fulfill. A better example.

Let's say you are a computer company and your customer orders a $1500 computer. The customer pays you for the computer but you haven't shipped the computer to the customer yet. The $1500 you received from the customer is unearned revenue. Unearned revenue is recorded as a liability until the obligation owed by your company has been fulfilled. This is because, even though your company has received the money for the order they have not fulfilled it and are liable to the customer to either fulfill the order as promised or if unable to do that, refund the customers money.

The entries above would be something like....

Cash Debit $1500

Unearned Revenue Credit $1500

Once the order is fulfilled and the customer has been shipped the computer and adjusting entry would then be made to reflect that the revenue has been earned something like:

Unearned Revenue Debit $1500

Revenue Credit $1500

This basically just moves the amount from the unearned revenue account to show that it has been earned. Cash had already been received so no adjusting entries would be required to the cash account.

Revenues earned but not yet billed would be an account receivable. If the customer gets the computer and hasn't paid for it yet, you've earned the revenue that would come from the computer but you haven't received the money yet. At this point the customer owes you (the company) and accounts receivable is debited with the amount owed.

credit

This is a difficult question to answer. I've been going through all transactions I can think of but none that will increase an asset and decrease a liability in the same transaction.

Receiving cash payment for an account receivable will increase the asset of cash, but it also decreases the asset of AR.

The purchase of equipment or supplies will do increase supplies or equipment but will either decrease the asset of cash or if bought on account will increase liability by increasing an account payable.

Remember there's always an equal debit and credit with any transaction. The term debit or credit doesn't indicate which of the accounts are used. You can debit and credit on both sides of the accounting equation in one transaction.

Assets increase by receiving money, supplies, property, or equipment, when any of these are increased with a debit then an opposite credit MUST occur.

If you receive money for a purchase the asset of Cash increases, but then so does the Owners Equity account of Revenue. (this doesn't have anything to do with liabilities.)

A liability is something your company owes, to decrease a liability a company makes a pay out in some form (usually cash), this will also decrease your assets (not increase).

This is pretty simple to answer as it doesn't need a lot of explanation or examples. An increase in accounts receivable would decrease a company's cash flow (incoming cash would be effected.) Accounts receivable are accounts of persons or other company's that owe you (or your company) money but has not yet been paid. Since this shows money owed to you by another there is no "cash" changing hands and that of course effects you (or your company's) cash flow.

Decrease Cash (credit) and Decrease Account Payable (debit).

This is if you're paying cash which of course is the common way to pay an account payable. An account payable is what you owe another person or company, by paying even a portion of the account it will decrease your liability (what you owe) as well as decreasing your amount of cash on hand.

The Accounts receivable subsidiary ledger or any other subsidiary ledger can be in the form of a card file, a binder notebook, a formal, pre-printed ledger page, or computer files. It will not have page numbers, but each account may have a unique number to help identify it. The accounts receivable subsidiary ledger is organized alphabetically by customer name and address; new customers can be added and inactive customers deleted, once the balance in their account is zero. To make ease in journalizing process, the accounts receivable subsidiary ledger are organized in alphabetical order.

payment in suspense to customers account as receivable account