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Accounts Receivable
Accounts receivable represents the money owed by clients to an establishment for the sale of products and services, which must be paid within an agreed timeframe. It is commonly executed by generating an invoice and delivering it to the customer.
2,500 Questions
When is long term liabilities due?
Long term liabilities are those that are due in a future fiscal year. In other words, one year or more.
Is accounts receivable included on the income statement?
If you are using a cash based accounting system, then no. If you are using an accrual based accounting system, then you have to include an accurate dollar amount of accounts receivable by the company. Typically a "reserve for bad debt" is also listed. This is a dollar amount which reflects a reasonable estimate of what might not be collected. The total of amount of Accounts Receivable minus the Reserve for Bad Debt is the amount of money you expect will absolutely collected.
What do current liabilities include?
Current liabilities included all liabilities payable in current fiscal year like accounts payable, current portion of long term liability etc.
Is receiving payment from account customer a liability?
Because money is being received from customer we are not owing.
Are accounts payable a credit or debit?
Accounts Payable is a Liability and therefore its normal balance is a Credit on the Balance Sheet
What are the components of current assets?
The components of current assets are creditors, cash, debtors and stock.
Is land a current or non current asset?
I believe that land comes under Property, Plant & Equipment which comes under non-current. So, as far as I can recall, it should be non-current.
Collection of a 600 accounts receivable?
If you're speaking $600 money received for an account receivable, the entry is
Debit to Cash for $600
Credit to the appropriate AR for $600
The acid test ratio does not include?
acid test / quick ration = quick assets / quick liablities
quick assets = current assets - stock- prepaid expenses
quick liablities = current liablities - bank overdraft
Is a basic principle of cash management increasing the speed of paying liabilities?
Yes, one of the basic principles of cash management is increasing the speed of paying liabilities.
Trade liabilities is the obligation of the entity to transfer cash or other resources to another party during a trade. An instance is a bank loan.
Is accounts receivable a current noncurrent liability?
it is current, if the account has not been paid and is past due after 30 days, it goes into collections. There is no such thing as a non-current accounts receivable.
Where will you put mortgage payable on a general ledger?
credit mortgage payable in the liability side of the balance sheet
5200 is a bad debt expense as company has estimated that it is possible that company will not be able to receive that amount from debtors.
Accounts receivable turnover ratio = 5338411 / 391648 = 13 times
In number of days per year = 360 / 13 = 27 days
the payment is good 30 days that happens to fall on the 3rd day of the month
Current ratio before payment = 800000 / 600000 = 1.33
Curren ratio after payment = 600000 / 400000 = 1.5
What is difference between advanced accounting and cost accounting?
ADVANCED ACCOUNTING covers accounting operations, patterns, merger of public holding companies, foreign currency operations, changing financial statement ...
Cost accounting:
A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step of production as well as fixed costs such as depreciation of capital equipment. Cost accounting will first measure and record these costs individually, then compare input results to output or actual results to aid company management in measuring financial performance.
