Beruflich Dokumente
Kultur Dokumente
Refers to amounts that are due to a business from its customers or other entities. Claims that are expected to be collected in cash. Classification:
Accounts receivable amounts owed by customers on account result from the sale of goods and services (credit card transactions using visa/mastercard/amex are considered as cash transactions but) if company sponsors its own credit cards, amounts owed by customers on these cards are included current asset Notes receivable claims where formal instruments of credit written promissory notes are issued as evidence of debt usually requires debtor to pay interest for time periods of 30 days or longer can both be a current or non-current asset Other receivables includes interest receivables, loans to company officers, advances to employees, recoverable sales tax, income tax
Subsidiary Ledger
Group of accounts that share a common characteristic. Provides supporting detail to the general ledger, freeing it from excessive detail:
For Accounts Receivables, Has a receivable account for each customer Total of balances in the customer accounts in the subsidiary ledger should equal the total balance in the general ledger receivable account occurs because when receivables transactions are recorded in the subsidiary ledgers on a customer-by-customer basis, summaries of these transactions are recorded in the general ledger Example: used by companies sponsoring a credit card of their own; recording credit card receivables for each of the customers in the general ledger accounts would make it difficult to determine the balance owed by any one customer at a specific point in time. at the end of each month, can be used to easily determine the transactions in each consumer's account and then send the customer a statement of transactions that occurred that month; therefore, can be used to determine interest revenue if the customer doesn't pay in full within a specific period of time Other usage inventory (to track inventory quantities and balances) accounts payable (to track individual creditor balances) payroll (to track individual employee pay records)
Summarized in the general ledger through a control account; must equal the total of the respective subsidiary ledgers at all times. Due to this, each journal entry that affects the control account is posted twice to the subsidiary ledger, and to the general ledger control account.
Managing Receivables
Determine who to extend credit to. Establish a payment period. Monitor collections.
concentration of credit risk required to be discussed in the notes to a companys financial statements