Accounts Receivable

trade in allowance is considered as acurent asset.

it can be explianed and understood with help of following example .

a firm has exchange a used ( 2nd hand ) machine for a new one. the worth of new machine has 20000. while the book value of old machine was 10000 but it was traded for worth of 12000, so it saved two 2000 cash , which is an asset.

New machine 20000(Dr)

Old machine 10000(Cr)

Trade in allowance 2000(Cr)

cash 8000(Cr)

A current asset is defined as an asset that can be quickly liquidated and turned into cash and in some cases used to pay current assets in no more than a year (or one accounting period).

Generally a building can not be sold or liquidated that quickly and therefore falls under PP&E (Property, Plant, & Equipment)

depreciation non current asseate

For general purposes, accrued interest payable is generally a current liability, however that depends on one major factor. When will the liability be paid? Any liability that a company can reasonably expect to pay off in 12 months (or less) or one accounting period is a "current liability" any liability that will be paid off at a longer time is a "long term liability"

So if the accrued interest will be paid in 12 months or less, then it is a current liability.

This term is similar to the normal terms (i.e. 2n10 net30) This term however just specifies a date. It means that if the company/person pays by the 10th of the month they can take a 2% discount, with the full balance (net) due by the 25th (with no discount).

Company's offer this kind of savings to help entice the buyer to pay off their account early. Although 2 percent doesn't sound like a lot, when dealing with thousands of dollars at a time 2 percent can add up to a huge savings for the purchasing company.

2n10 net30 is 2 percent discount if paid within 10 days of the invoice date, with the net being due 30 days after invoice date.

Neither, shares are listed under owners equity.

No, Accounts receivable are amounts due from customers for credit sales

A check in most accounting is considered the same as cash and therefore it is treated the same.

A debit to the cash account will be made to note payment of the account and a credit to the appropriate account payable account to bring the AP down to a zero balance.

The check will then be deposited with the normal bank transactions and recorded as such in the bank statements for the company.

Accounts receivable would appear as an asset (+) on a balance sheet.

yes the sales will drive the main steam in the account receivable because when the sales happen the account receivable collection attampt will start

single entry means cash entry

15

I've never really ran across this, but my understanding, and I do hope that I am at least close is:

A trade invoice is an invoice dealing with a "trade", product for product or service for service, even product for service and vice versa. (no cash is involved.)

Where a "sales" invoice is pertaining to a cash/product or cash/service transaction.

Net Accounts Receivable is found by subtracting the "noncollectable" amount in AR from the balance. Also referred to sometimes as ADA (allowance for doubtful accounts).

by looking at the owners' equity from last year's report

No, capital assets are listed as PP&E (Property, Plant, & Equipment). An account receivable is either a current asset or a long-term asset, not a capital asset.

The group of accounts that is comprised of only assets are prepaid expenses. Money can be owed on such things as buildings and other equipment.

Credit Decreases an Asset and Debit decreases Owners Equity.

it s transfer to profit and loss account.

credit the debtor and debit the creditor

debit interest receivable
credit interest income

Accounts Payable, bank overdraft, GST payable

Current liabilities are the source of creating creating current assets. Current assets bring in cash to meet the current liability. Thus they represent the short term sources and short term uses.