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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
Difference between trade creditors and other creditors?
A trade creditor is usually someone who supplies you with core products. For example if you are a builder then your trade creditors supply your building materials, fuel for you truck, tools, etc.
A sundry creditor is the company that supplies other items like the water cooler in the office, or the company that sold you the window blinds.
Any invoices dated during a given month with these terms must be paid by the 15th of the following month. For example; invoices dated August 6, 19, 23, and 31, Prox 15 are all due by the 15th of September.
What are the steps necessary to reconcile a bank statement?
ending balance + outstanding deposits - outstanding check = balance
How do you recognize account payable?
Account payable is an account that is a Liability (current). When a person or company owes another company money on account, that is an account payable.
Is revenue always recognized when cash is collected?
no. revenue could be accounted for in a prior period. For example:
Debit Accts Rec. Credit Sales.
then
Debit Cash. Credit Accts Rec. later in the future.
The origins of these terms can be traced back to 1494 when the Italian Friar Luca-Pacioli first recorded the double-entry bookkeeping system. It was he that first described the use of the Latin terms 'Credre' and 'Debere' . In the 1500s, English translators used these Latin terms to create the terms 'Debit and Credit'. The Latin terms obviously helped create the bookkeeping abbreviations (Dr.) and (Cr.) as well. This is because there is no 'r' in the English word Debit but there is one in the Latin term 'Debere'. (copied from a website)
What are the Characteristics of a good budget?
careful planning, practicality, flexibility, and accessibility
What is the most dangerous Sexually Transmitted Infection?
It is HIV-AIDS. Human immuno deficiency virus;Acquired immuno deficiency syndrome.
How much is 13.00 per hour annually?
you take 13.00 per hour times a 40 hour work week and that = $520.00 then mutiply it times 4.3 which represents a month and that = $2236 . You then mutiply that times 12 months and you get $26,832.00 per year
What is the sales workflow cycle?
Sales Workflow Management impacts overall sales effectiveness, improving both top-line revenue growth and bottom-line cost management.
What is the definition of a credit sales invoice?
A sales invoice is a commercial document that itemizes a transaction between a buyer and a seller. An invoice will usually include the quantity of purchase, price of goods and/or services, date, parties involved, unique invoice number, and tax information. If goods or services were purchased on credit, the invoice will usually specify the terms of the deal, and provide information on the available methods of payment. Also known as a "bill", "statement" or "sales invoice".
A delay in the payment of accounts payable?
A firm would delay the payment of Accounts Payable because they could use the money to invest in short term investments and earn some return
When is an accounts receivable created?
An account receivable is created when a company has earned cash from a customer but has not yet received it.
An accounts receivable is created when a business sells an item or items to a customer, but hasn't yet collected the payment. Many times, an invoice is mailed to the customer and the customer pays the invoice within 30 days, though the terms can vary.
What is the major difference between adjusted trial balance and trial balance?
The trial balance is just that, a "trial" balance. It shows where the company stands at a certain point in time. the "adjusted trial balance" does the same thing with one slight difference, it's the balance after all adjusting entries are made. These entries may include, the expiration of pre-paid insurance, payments received and the closing of the books for the period.
For example, you can begin your month with a trial balance, to ensure everything is correct, at the end of the month you have made all your adjusting entries and transactions, after this point you want to have your adjusted trial balance (because entries have been "adjusted" for the period)
Which is the disadvantage of payable?
The disadvantage of a "Payable" is the fact that it is a liability to the company, or money that they owe. Having "payables" lowers the Owners Equity of a business.
One advantage however is this, if I want to buy a used car for my business that is going to cost say $4,000.
1. I can either pay cash out and pay off the car or
2. I can pay "payments" of say $400 a month for 10 months. The advantage of doing this is I have a better chance of having "income" from my business to cover the monthly payment rather than spending the entire $4,000 in cash and shorting my cash account of a liquid asset I could use in order to operate my business effectively.
If you started the period with 10,000 in A/R with a 1,000 allowance for bad debts (10%) and then determined that 5% was an adequate allowance but A/R at the end of the period was 50,000, you would still have to increase your allowance by 1,500 to a balance of 2,500.
How do you calculate accounts receivable turnover rate?
Net Sales / Average Accounts Receivable = Account Receivable Turnover
What is the accounting journal entry to record audit fees?
If paid in cash use the following accounts:
A debit to Audit Fee Expense
A credit to Cash
If the fee is going to be paid at a later date use the following accounts:
Debit to Audit fee expense
Credit to Audit fee payable
Once the fee is paid then we use the following accounts
Debit to Audit fee payable
Credit to Cash a/c
