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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 is the difference between current asset and floating asset?
assets which is highly liquid or converted into cash in short duration, but floating assets is a particular assets converted into cash in short time
The buyer who purchases and takes ownership of another company's accounts receivable is called a?
The buyer who purchases and takes ownership of another company's accounts receivable is called a factor.
Most supplies are considered current/ short-term assets because they will be utilized within one year (fiscal or calendar).
What are the example of non current assets?
non current assets are like land, building machinery premises etc
Net Receivables the same as accounts receivables?
Accounts Receivable means that people owes you money, when you sell products or service and they have to pay in 30 days, 45 days, etc., So for example: If we sell $500 in goods or service and in the transition of 30 days, our A/R equals to $500. But if they pay in cash, our accounts receivable is $0.
To get A/R Net you need to know your provision for loan losses. When the client don't pay on the 30 days terms (it can be 45 days, etc), you write off for your provision for loan losses, this means that this amount is lost, because the customer fail to pay the amount in the 30 days
Now, A/R Net simply you can get it like this
(A/R) - (Provision for loan losses) = A/R Net
What is current assets less current liabilities called?
Current assets minus current liabilities is called working capital and working capital is that free cash amount which is available for running day to day business functions.
If payment on a current liability?
Payment On Current Liability
Debit The Current Liability (say Sundry Creditor) (Liability Decreases)
Credit Cash Or Bank (Current Asset Decreases)
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How do you approve or certify a managing account?
On the managing account list, select the account and click the Certify (or Approve) button
If supplies are return back to company and a reduction is on the account is it a credit or debit?
Debit account
Distinguish fixed from current assets?
current assets are those assets which can be easily converted into cash while fixed asstes can not be easily converted into cash
example
fixed= land, building, machinery
current= debtors , bill receviables
The ratio of current assets to current liabilities is called the?
The ratio between current assets to current liability is called "Current Ratio".
What are the three accounting issues associated with accounts receivables?
Associated accounting issues include recognizing accounts receivable, valuing accounts receivable, and disposing of accounts receivable.
Reduction in liability for 550 should be recorded in journal to reduce the excess payment.
A customer's check received in settlement of an account receivable is considered cash True or false?
true
Acca Past Sample Questions and Answers of Financial Management?
true or false, managers should under no conditions take actions that their firms risk relative to the market, regqardless of how much those actions would increase the firms expected rate return.
A transaction that is likely to cause an increase in a current liability is?
The purchase of anything on CREDIT, as long as that account is to be paid off within 1 year (or one accounting period)
A current liability is anything a company owes that is reasonably expected to be paid off within one year or one accounting period.
What should a company do to improve its accounts receivable turnover rate?
The aging schedule can be used to identify the customers that are extending beyond your collection terms. If the bulk of the overdue amount in receivables is attributable to one customer, then steps can be taken to see that this customer’s account is collected promptly. If overdue amounts stem from a number of customers, your business needs to tighten its credit policy toward new and existing customers.
What are temporary current assets?
Temporary current assets would probably refer to items that are used up quickly and then replaced.
Items such as office supplies, cleaning supplies, things to keep a business operational are considered assets, but because they are used up quickly and replenished regularly, they are considered "temporary".
Supplies once used, become an expense.
'water reserves' is an artificial body of water.
A reservoir, A natural or artificial pond or lake used for the storage and regulation of water . Reservoirs may be created in river valleys by the construction of a dam or may be built by excavation in the ground or by conventional construction techniques such a brickwork or cast concrete.
The term reservoir may also be used to describe underground reservoirs such as an oil or water well.
Do liability accounts increase on the credit side?
Yes, liabilities maintain a "credit" balance, which means they will increase with a credit and decrease with a debit. For example, if you purchase land on credit, the Note Payable is a liability and is increased with the credit. The book transaction may look something like:
Land (debit) $50,000
Note Payable - Land (credit) $50,000
