Internal controls for accounts receivable are used to reduce the risk of fraud and error in the accounts receivable process. The purpose of the accounts receivable internal control checklist is to ensure that valid sales invoices are properly recorded and that customers pay promptly.
Internal Control Procedures for Accounts Receivable January 20th, 2017Team
The accounts receivable control account is an account in the general ledger which maintains summary postings relating to accounts receivables. The account, which is sometimes referred to as the sales ledger control account, is used to allow the detail of customer transactions to be kept in a separate subsidiary personal account ledger which is not part of the double entry bookkeeping system.
Accounts Receivable Control Account December 7th, 2016Team
A business has a balance due from a customer on its accounts receivable ledger, but also owes the customers business an amount on its accounts payable ledger for goods supplied. A contra entry is used to offset the two amounts, leaving a net amount outstanding to the customer.
The chain discount calculator works out a products net price after applying multiple trade discounts to its list price. This free Excel calculator also provides a summary showing the original price, total discount, and net price, together with a calculation of the single equivalent rate (SED).
Chain discounts are sometimes called multiple discounts, and refer to a of discounts which are applied to an original selling price (list price) to arrive at a net sales price. The discounts are applied in sequence and are calculated using the series discount formula.
Chain Discounts in Accounting November 6th, 2016Team
The allowance for uncollectible accounts method is used to estimate the bad debt expense required to reflect uncollectible accounts receivable at the end of an accounting period. The method complies with the matching principle and for this reason is preferred over the direct write off method.
The direct write-off method of accounting for uncollectible accounts is used to remove specific uncollectible amounts from the accounts receivable balance when they are identified. This debt write off method does not comply with the matching principle and can only be used for immaterial amounts.
This free Excel cost of trade credit calculator can be used to calculate the annualized cost of offering early payment discounts to customers or alternatively of not taking early payment discounts from suppliers.
Cost of Trade Credit Calculator November 6th, 2016Team
A customer has been invoiced a total of 5,000 for goods and the business has decided that there is doubt as to whether the customer can pay in full. They have decided to adjust the allowance for doubtful accounts provision by 500 in respect of the accounts receivable balance of 5,000.
Allowance for Doubtful Accounts November 6th, 2016Team