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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
What type of asset is accounts receivable?
Accounts have 3 types of accounts those are : Real, Nominal, Personal.
Nominal accounts are those accounts which deals in income and expenses.
Real accounts deals in accounts like cash, accounts recievable etc.
Personal accounts deals in accounts of people like Mr.Sam account.
So Account Recievable is Real account. ---- In financial accounting, accounts receivable is not a "cost" at all. Accounts receivable is an account that records money owed to a company by a customer. This account is recorded under the "current asset" accounts on the Balance Sheet.
What purpose does the schedule of account receivable serve?
Schedule of accounts receivable helps the management to find out which customer has not paid for longer period of time so that focused efforts should be put toward that customer for recovery of amount.
What should be considered a liability?
A liability is anything owed to one company/person by another.
If you owe money to someone it is a liability.
How do you determine the optimum level of current assets?
a trade off between profitability and risks.
In total owners equity are liabilities included?
No, Liabilities are not included in the total OE. Remember the account equation...
Assets = Liabilities + Owners Equity
If you have the total of your Assets and Liabilities, to find your OE then the equation would be written as this..
Assets - Liabilities = OE
Can you sue for interest on an unpaid accounts receivable on oral contract in Arizona?
Generally no, unless you can prove that the oral contract included interest to be paid. It's going to be difficult enough to prove an oral contract existed if the person you are suing denies that such contract was ever made. If you have witnesses to the fact, this helps, otherwise it is going to end up being your word against theirs and depending on the judge, the outcome may not be favorable.
How long do you need to keep accounts receivable records?
Various companies keep the records various times. For the most part (for tax purposes) it is best to keep all records for 5 to 7 years after the date.
What does dr and cr stand for in accounting terms?
dr and cr are debits and credits, and are abbreviations from the original Latin words.
Journal entry for Invoice received but goods not received?
I believe the answer is as follows:
If payment not made : No action
If payment made : Dr Purchases Cr Bank
Can someone verify this? Thanks!
When are dividends payable not recorded as current liabilities?
Dividend is the part of shareholder, if a company start dividend can not be stopped. We can say it is the profitable part of business, which distribute among the shareholder. It may be less or more amount according business profit. So, it cannot be payable.
entry to this would be
plant account dr 5600
to suspense account 5600
in this entry we had to debit plat's account by rs 2800 but we had credited it by rs 2800 so
we will debit plant's account by rs 5600 with suspense
What is the Impact of behavioral Sciences on financial accounting?
The term behavioural sciences is a discipline that explores the activities of and interactions among organisms in the natural world. It involves the systematic analysis and investigation of human and animal behaviour through controlled and naturalistic observation, and disciplined scientific experimentation.
Behavioural sciences includes two broad categories: neural-decision sciences-and social-communication sciences. Decision sciences involves those disciplines primarily dealing with the decision processes and individual functioning used in the survival of organisms in a social environment. These include anthropology, psychology, cognitive science, organisation theory, psychobiology, and social neuroscience.
On the other hand, communication sciences include those fields which study the communication strategies used by organisms and its dynamics between organisms in an environment. These include fields like anthropology, organisational behaviour, organisation studies, sociology and social networks.
Impact of behavioural science on Accounting
It is concerned with testing the effects of human psychological behaviour on strategic planning, budgeting, control, financial reporting, and decision-making in organisations. For example, a budget (and hence control and performance evaluation systems) has behavioural implications on everyone in an organisation: those who participate in preparing it, those who use it to assist in the decision-making process, and those who are evaluated using the budget. In addition, the quality of corporate financial reporting, particularly the quality of publicly reported earnings numbers, is influenced by the behaviour of managers who intentionally try to manipulate earnings for their own benefits, and in order to influences investors' psychological behaviours, which can also be affected by analysts' self-interests. Auditor's independence can also be weakened by auditors' self-interests and over-confidence, and so as managers.
The aim of this special issue is to publish high quality, innovative theoretical and empirical papers that promote the understanding of behavioural corporate accounting, in order to provide a platform for future research agenda.
Subject Coverage
The issue welcomes theoretical or empirical papers that explore managers, auditors, and regulators regarding corporate earnings quality. Topics include, but are not limited to:
- The effects of human behaviour and psychology on the quality of corporate financial reporting
- The effects of human behaviour and psychology on internal decision-making, internal control, performance evaluation, customer satisfaction, total quality management, and companies' performance
- The effects of human behaviour and psychology on investment decision-making
- The behaviour implications of budget
- The behavioural implications of activity-based costing
- Audit quality and over-confidence
- Internal control system and earnings quality
- Restructuring costs and earnings quality
- Corporate governance and earnings quality
- Merger and acquisition and earnings quality
- Sarbanes-Oxley Act and earnings management
- The effects of Sarbanes-Oxley Act on the decision of managers to cross-list in the US
- Analysts' earnings forecasts and earnings management/quality
- Audit quality/auditor's independence and earnings management
- The effect of IFRS introduction on earnings management of EU companies
- The market reaction to the introduction of IFRS in Europe
- International cross-listing and corporate disclosure
- The quality of the internet corporate reporting, and investors' reaction to it
Is long term debt an operating liability?
NO. But the Current maturities of long-term debt is an operating liability.
Is accounts payable considered a source of financing activities?
Yes accounts payable is non-formal kind of source of finance because every company allows time for payment of accounts payable and due to that reasons it is source of finance for that time period.
An increase in accounts receivable is subtracted or added to what?
This depends on what caused the increase. Accounts receivable is the account used when a person or company owes YOU money. With an increase in AR, that means you either performed a service or sold goods to a person or company on account. Since this is an "increase" you will (ADD) the amount to your Account Receivable and Income (or Revenue).
An invoice ID is a unique 32 character identifier that is assigned to an invoice.
In order to view/pay an invoice, you must enter the Invoice ID. You may also use the invoice ID in conjunction with your E-mail address to retreive your customer log in information, (ie: your customer ID and password).
PR could stand for- Public relations or Puerto Rico. It depends.
How do you write off Accounts Payable for defective goods?
Accounts Payable is the account you use when you "owe" another person or company money for either a service or product. When it comes down to it, you don't "write off" the account but instead you "close" the account. This is done by a couple of methods.
Since you are referring to "defective" goods, more than likely you will want to return the defective product for either a refund or replacement. If you choose replacement and it turns out to be an even trade, you may still wish to make the following changes. Since the product will have a new serial number, you will want to note this in the account.
Account Payable - Washing Machine (debit) $500
Equipment-WM- Exchange for new product (credit) $500
This removes the original equipment from your books.
Equipment-WM-Replacement for defective product (debit) $500
Account Payable- Washing Machine (credit) $500
This places the new equipment onto your books
However, if you choose refund, then you post to the account just opposite of how it was posted when your made the initial purchase.
For example, say you purchased a Washing Machine for $500 on account. When you purchased this item, your accounts would be
Equipment-Washing Machine (debit) $500
Account Payable - Washing Machine (credit) $500
If you return the defective machine and get a refund (or credit since you haven't paid for it yet) you reverse the above by crediting your equipment noting the reason and debiting the account payable.
I could go into a few more details, but if you are into accounting then you already know the process of paying off an account payable and how that transaction is posted.
The percent of sales method
How do you determine the amount of finished inventory?
The finished inventory, aka Cost of Goods Sold, is determined by either
a. Cost of Goods Available for Sale less Cost of Ending Inventory
or
b. Using either LIFO, FIFO or Weighted Average method of cost-flow calculation.
