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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
Total manufacturing overhead cost?
Total manufacturing cost
A company assigns overhead cost to completed jobs on the basis of 116% of direct labor cost. The job cost sheet for Job 413 shows that $23,936 in direct materials has been used on the job and that $10,400 in direct labor cost has been incurred. A total of 1,450 units were produced in Job 413.
False
Because it determines when revenue is credited to a revenue account.
Cash method means the transaction is reported when cash is received, but the revenue recognition concept means a transaction is reported as a sale even if no money has been paid. Cash basis does not recognize payable or receivable accounts.
What is the journal entry for receiving money from customers on account?
debit cash
credit accounts receivable
How do you create a trust that can receive assets?
The purpose of a trust IS to receive assets and hold them for the benefit of someone else.
Trust law is one of the most complex areas of law. If you want to create a trust you should consult with an attorney who specializes in trust law and who has a good reputation in your community. She/he will review your situation, discuss your needs, evaluate the property you want to transfer to your trust and then draft a trust that will meet your needs.
Increase an asset and increase owner's equity?
Beacuse assets are increase the wporking capital and we can easily converted them int cash and hence increase the owners equity.
What is account receivable cycle?
Accounts receivable is any amount of money owed by a customer to a business. The cycle of accounts receivable includes services being rendered, a customer being billed, and the business being paid.
Is inventory an example of a long term asset?
Inventory is usually stocked for short term time period for one to three months so it is a current asset and never be considered as long term asset.
What are the peculiar problems of small business enterprise?
Capital is one of the major problems of small business enterprise.
Is notes payable an asset or a liability?
Accounts Payable and Notes Payable are liabilities. Accounts receivable - assets
All "payable" accounts are "liabilities". This is because a liability is something the company OWES, a payable is the very same thing, hence the term "payable".
Though some payable accounts change from being a payable to an expense, they are still liabilities as long as they are "payable", these include:
Interest Payable (liability until paid, then reverts to Interest Expense)
Salary or Wages Payable(liability until paid, then reverts to salary or wage expense)
Payable accounts maintain a "credit" balance, meaning they increase with a Credit and Decrease with a debit.
Now the quick answer:
Payable = Liability
Receivable = Asset
Can a transaction that causes an increase in an asset also cause a decrease in another asset?
Yes. If you purchase a new desk, your furniture asset account would increase, and your cash asset account would decrease.
All of the following occur with a double-entry accounting system except?
Each business transaction will have only two entries.
Why is corporate long-term debt riskier than US government long-term debt?
A significant part of the equation to evaluate risk of long-term debt is the reliability of the organization issuing that debt and the likelihood of paying back that debt. In most cases, investing in the US Government is a lower risk than investing in a corporation.
Is dividends Payable an asset?
Dividend payable is the amount which is payable by the company to share holders so it is a liability of company and not an asset.
How do you decrease an equity account?
By withdrawing from business we can reduce equity account or debit balance reduce the equity account.
Current assets and current liabilities Examples?
Current Assets:
1 - cash
2 - bank
3 - inventory
Current liabilities:
1- accounts payable
2 - loan payable
3 - tax payable etc
What type of account is accounts payable?
Salary Payable, like other payable accounts are liabilities. It's something the company owes, therefor they are "liable" for that amount making it a liability. Once paid it is then an "expense"
For example, you have $5,000 in salaries to pay, but you won't pay them until the following month, in accrual accounting we would do two entries for this transaction.
Salary Expense (debit) $5,000
Salaries Payable (credit) $5,000
Because Salary Payable is a liability account it maintains a credit balance and is increased with a credit and decreased with a debit. Once the salaries are paid the adjusting entry would be:
Salaries Payable (debit) $5,000
Cash (credit) $5,000
its nominal account & this Entry is salary a/c
Does a debit decrease liability?
Yes, a debit decrease liability and a credit increase liability. if a debtors/customer make the repayment obligation, it will decrease debtors, meaning decrease in liability.
Current installment of long term debt?
The current portion of long-term debt is usually broken out to an a liability account known as Current Portion-Long Term Debt. This is usually for a 12-month period.
Using the amortization schedule for the loan, debit the long-term note account for the 12 month period of principal and credit the short-term liability account. Then when the payment is made, debit the principal to the short-term account and the interest to interest expense.
Companies account for the possibility that some of their customers might not pay down the road by either continuing to send out invoices at regular intervals or taking the extreme measure of taking them to court.
That would mean that the liabilities would be understated.
