0
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 are fifth third prox payment terms?
Payment is due on the 5th day of the 3rd month following the invoice date. For example, a March invoice would be due on June 5th.
Is notes payable a part of non interest bearing current liabilities?
Yes, as notes payable don't have interest attached with it becasue it is not that kind of loan it is just indirect loan or debt.
'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
What is the term for the average time it takes customers to pay?
The average time it takes for customers to pay is referred to as Days Sales Outstanding. Computing this ratio lets companies know how fast they are turning sales into cash.
What would happen without accounts receivable aging?
You would not know how long the accounts have been due/overdue and the amount of bad debts.
What is difference between fixed asset and non current asset?
Current asset appears first in the balance sheet such as cash, accounts receivable and inventory. Fixed assets are those such as land, buildings, vehicles, furnitures, office equipments.
In short, fixed assets are also known as non-current asset. It can also be known as capital assets or plant, property and equipment.
Is a customer deposit a current liability?
Yes, customer deposits is that amount which is received in advance for the services in future.
Uncollectable allowance = 130000 * 2%
Uncollectable allowance = 2600
Is accounts receivable a revenue?
Accounts Receivable is an asset since it is a resource controlled by the entity as a result of past transaction with the future economic benefit to flow to the entity.
Sale of goods and services is a revenue and not accounts receivable.
Why does a decrease happen in Accounts Receivable?
Decrease in accounts receivable happens on the account of receipt of payments, discounts given, or bad debts written off.
Well, than one can be 'Jack of all Trades', instead of 'Master of One'
What type of account is Merchandise Inventory?
Merchandise Inventory is an asset account that shows up on the balance sheet.
Memo Accounts are used to record non-financial or statistical data such as payroll hours or FTE's. Usually a Memo Account journal entry does not require an off-setting entry, i.e. Memo Accounts are one sided entries.
Why should sales receipts of cash from credit customers be recorded and posted immediately?
Sales to and receipts of cash should be recorded immediately to provide a clear overall business picture and allow positive business decisions to benefit of the company or business for that period.
What transaction would decrease an asset account and decrease the owner's equity account?
Give me an example for what, the transaction would decrease an asset account and decrease the owner's equity account?
When confirming accounts payable emphasis should be put on what kind of accounts?
Vendors that the company has made a large number of purchases from (in terms of dollar value). The account balance does not matter.
What are the basic accounting concepts and conventions?
Major aspect of accounting in any business organization is financial accounting and inventory accounting. While the financial accounting deals with the monetary aspects the inventory accounting deals with the quantitative aspects of the goods and services of the business organization. Important financial accounting aspects are payment voucher, journal voucher, cashbook, general ledger, bank reconciliation and trial balance. Important inventory accounting aspects are opening balance, purchases, sales and closing balance.
Can a increase in one asset increase another asset?
Since both sides of the balance sheet (the Assets side and the Liabilities/Owners' Equity side) must have equal totals, an entry showing an increase in an asset must be balanced with an corresponding increase in a liability or a decrease in another asset.
Generally, an increase in an asset (e.g., the acquisition of a new asset) means that either we have decreased another asset (e.g., cash) to pay for it, or we have incurred debt to acquire the asset (thereby increasing our liabilities).
1) increase in one asset - corresponding decrease in another asset (e.g. we pay cash for new asset)
2) increase in one asset - corresponding increase in a liability (e.g., we acquire an asset on credit)
What is the general ledger journal entry to reverse the write off of accounts receivable?
Accounts Receivable - DR Bad Debts written off - CR
How do you set up the allowance for doubtful accounts?
Allowance for doubtful account is set up based on past experiance of uncollectibility of account receivable. There are two approach in calculating it. firstly based on net credit sales which calculate how much % of net credit sales in the past became uncollectible. secondly based on Account receivable balance which calculate how much % of AR balnce became uncollectible. the asumption here is what happened in the past wil occure repeatly in the future. normally companies using aging schedule. But it is better to use credit rating of our customer to estimate the uncolletible account.
