Business Administration 2257 Chapter Notes - Chapter 8: Subledger, General Ledger, Accounts Receivable
1 Oct 2017
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Document Summary
Receivables refer to amounts due to a businesses from its customers or other entities. They are claims expected to be collected in cash - frequently referred to: Financial assets = receivables and other types of investments are considered financial assets. Accounts receivable = amounts owed by customers on account - result from sale of goods and services (generally collected within 30 days and classified as current assets) Notes receivables = claims where formal instruments of credit - written promise to repay are issued ads evidence of debt (normally required to pay interest and for time periods of 30 days - or longer) Other receivables = include non-trade receivables that do not results from operations of the business (includes interest receivable, loans to company officers, advances to employees, etc. ) For service company, receivable is recorded when service is provided on account. For merchandising company, receivables are recorded at point of sale of merchandise on account.
