Business Administration 2257 Chapter Notes - Chapter 8: Promissory Note, Subledger, General Ledger
27 Sep 2016
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Accounts receivable are amounts owed by customers on account: they result from the sale of goods and services, expected to be collected within 30 days. Other receivables include nontrade receivables that do not result from the operations of the business: e. g. interest receivable, loans to company officers, advances to employees, sales tax recoverable, and income tax receivable. For a service company, a receivable is recorded when a service is provided on account. For a merchandising company, a receivable is recorded at the point of sale of merchandise on account. When a customer uses a bank credit card to make a purchase, we record the transaction as a cash sale because banker honour the credit card receipts as cash. If the company sponsors its own credit card (i. e. canadian tire), such a sale is considered a credit sale (and debit being accounts receivable) A subsidiary ledger a group of accounts that share a common characteristics.
