Explain What are the issues related with Accounts receivable?

Correct Answer: analyzing and interpreting financial reports

Explanation:

The three steps in the accounting process are

 

1. Identification,

2. Recording, and

3. Communication. 

 

Hence, analyzing and interpreting financial reports is not involved in the accounting process.

Correct Answer: the capital required to build the factory

Explanation:

Value is the monetary worth of something, in this case, it is an item.

In option A, since it is talking about capital which is measured in monetary terms.

The value of an item is determined by its quality and its age. Often antiques with good quality are sold in the market with a high value and are sometimes auctioned.

Correct Answer: Both B & C

Correct Answer: Income statement - Statement of retained earnings - Balance sheet

Explanation:

The financial statements should be prepared in the following order:

Income statement - Statement of retained earnings - Balance sheet

 

1. Income statement reports revenues and expenses and calculates net income or net loss for the time period.

2. Statement of retained earnings show how retained earnings changed during the period due to net income or net loss and dividends.

3. Balance sheet reports assets, liabilities, and stockholders? equity as of the last day of the period.

Correct Answer: Generally Accepted Accounting Principles (GAAP) are basic accounting principles and guidelines are concepts that govern the field of accounting Accounting principles and guidelines include : * Business Entity Assumption * Accounting Period * Historical Cost Concept * Full Disclosure Principle * Cost Principle * Matching Principle * Materiality * Monetary Unit Assumption

Correct Answer: Before answering the above question let us first understand the meaning of Intercompany transactions Intercompany transactions are those transactions that takes place between two or more entities of the same group of company So the receivable of one entity would the payable of another entity All intercompany transactions are eliminated befor preparing the final Balance sheet of the group company

Correct Answer: Accounts Receivables help small businesses by providing short-term liquidity Also continued sales on credit provide the much needed continuity for small businesses

Correct Answer: An accrued receivable is either a trade receivable or a non trade receivable for which a business has earned revenue, but for which it has not yet issued an invoice to the customer You normally create an accrued receivable in either of the following scenarios: * Milestone A milestone has been reached in a contract with a customer, where you are clearly entitled to a specific, pre-defined amount, but the contract does not yet allow you to issue an invoice; or * Services The contract with the customer states that the customer will pay you for hours worked, rather than for a specific work product For example, there may be 10 hours of work that will eventually be billed at a rate of $80 per hour, so you accrue the receivable for $800 The journal entry to create an accrued receivable is a debit to an accounts receivable account, and a credit to the revenue account It may be useful to create a unique general ledger account for accrued receivables, rather than using the main trade receivables account, in order to clearly show these transactions In addition, you should set these journal entries to automatically reverse themselves in the next accounting period; you would then replace the accrual in the next period with the actual invoice (assuming that there is a billing event in the next period) If you are unable to create an invoice in the next period, then you should continue to accrue and reverse the revenue and accrued receivable in every period on a cumulative basis until you can eventually issue an invoice For example, ABC International has completed a milestone in a project to install a dam, though it is not allowed under the contract to issue an invoice more frequently than once a quarter It therefore accrues revenue and a receivable of $50,000 at the end of January The journal entry automatically reverses at the beginning of February ABC then earns another $30,000 on the next project milestone in February, but is still contractually unable to issue an invoice It therefore accrues revenue and a receivable of $80,000 in February The journal entry automatically reverses at the beginning of March ABC then earns another $70,000 on the next project milestone in March It is allowed to issue a quarterly invoice at the end of March, so it issues an invoice for $150,000 By using accruals, ABC has recognized $50,000 of revenue and receivables in January, $30,000 in February, and $70,000 in March, rather than recognizing all $150,000 in March, when it issues an invoice to the customer You should not use accrued receivables if you cannot justify to an auditor that there is a clear obligation by the customer to pay the company for the amount of the accrued receivable Otherwise, there is a presumption that the business has not yet reached the point where the customer has a clear obligation to pay If you use accrued receivables, expect auditors to pay particular attention to their justification For example, you should not accrue receivables in a case where a business is providing services under a fixed fee contract, and it earns revenue only when the entire project is complete and approved by the customer Revenue has not really been earned prior to completion, so there should be no accrual prior to that point

Correct Answer: Debtors are the main role of the business he is the entire back bone of the business The goodwill of the concern is in the hands of debtors because he is the person who takes our product or raw material to the customer or manufacture so he is takes the main role in the business in finance and business development

Correct Answer: As sales occurs every customer is not able to pay the bills that's where A/R are occurs the goal of A/R is to maintain summarize & record all the transactions related to unpaid a/c or future collections or A/R