Account Receivable

Revenues define the income from a company’s operations during an accounting period. These revenues may arise from the sale of either goods or services. Similarly, they may come from both cash and credit sales. Regardless of their source, revenues play a significant role in a company’s profits and success. Therefore, companies strive to increase the …

How to Record Sales Returns and Allowances? (Explanation and Journal Entries) Read More »

What are Accounts Receivables? Accounts receivables are the amounts that are collectible from the customers due to the credit sales that the company sells the products or services from credit sales. This outstanding amount ranges from a few days to a fiscal year and sometimes more than one year. Companies allow their customers to pay …

Are Accounts Receivables Asset or liability? What is its normal balance? Read More »

Overview Accounts receivable represents the outstanding amount owed to a business from selling products or services on credit. Accounts receivables are itemized in the balance sheet as current assets. Analyzing the quality of accounts receivables for an entity is essential in assessing its financial stability. Companies accept accounts receivables as it may persuade more sales …

Accounts Receivable: Measurement Classification and Journal Entries Read More »

Introduction Accountants use accounts receivables aging as a management technique to evaluate a company’s accounts receivables and find out existing irregularities. The accounts receivables aging report is an essential comparison and strategic financial mechanism that shows outstanding amounts of receivables for a period of time. The accounts receivables aging method categorizes the receivables based on …

How Do You Calculate Aging Accounts Receivable? Read More »

Definition: Notes receivables are written promissory notes which give the holder or bearer the right to receive the amount mentioned in the agreement. It is treated as an asset by the holder of the note receivable. Sometimes accounts receivables are converted into notes receivables to allow the debtors to pay the balance. If the note …

Notes Receivables – Definition, Importance, Example, and Classification Read More »

Definition: Notes receivables describe promissory notes that represent loans paid from a company or business to another party. The note comes with a promise from the borrower that it will repay the lender at a future point in time. Similarly, a note receivable gives the holder, or the lender, the right to receive the amount …

What is a Note Receivable? (Definition, Explanation, and Journal entry) Read More »

What is it? When a company makes sales, it doesn’t collect cash from all the customers. Some customers pay at the time of purchase itself and some pay on credit terms. When customers fail to pay on the due date and the company assumes that the money can’t be collected, then it is treated as …

How to Calculate Bad Debt Expense for Your Company? (Explained with Example and Entries) Read More »

Bad debts are unavoidable for companies. Any company that offers credit sales will also have bad debts associated with them. It is because when a company offers credit sales, it accumulates accounts receivables. Accounts receivables are a group of balances that represents payments owed by third parties, usually customers, to the company. Every company has …

Journal Entry Bad Debt Expense: Example and Explanation Read More »

What is bad debt? When a company sells products to its customers, it can either collect the payment or allow the customer to pay at a later date. In the case of credit sales, the company must record the sale and the associated receivable balance.      When the customer repays the amount later, the company …

Bad Debt Expense: Example, Journal Entry, and More Read More »

Meaning of Other receivables Other receivables generally come with the headings “Trade receivables and others” in the financial statement of large listed public companies. Other receivables are disclosed under the headings “Current Assets” in the balance sheet of the company at the end of the period. These are residual trade or non-trade receivables that have …

What are Other Receivables? Meaning, Formula, And Example Read More »