Revenue and receivables

In most businesses, what motivates the balance sheet are fresh and sales. In other words, they cause the assets and liabilities in a business. One of the most complex accounting are accounts receivable. A hypothetical situation, imagine a company that offers its customers a 30 day period credit, which is fairly common in transactions between enterprises (not transactions between a company and the individual consumer).

An asset of debtors accounts shows how much money of customers who have purchased products from credit must always undertaking. It is a promise of case to receive company. Basically, accounts receivable is the amount of revenue not collected at the end of the accounting period. Cash does not increase until the company actually collects money for its customers. However, the amount of money in accounts receivable is included in total income from sales for the same period.The company is sales, even if it has not acquired yet any vente.Chiffre business money is then not equal to the amount of money accumulated by the company.

For real cash flows, the accounting officer must subtract the amount of credit not collected by the turnover by espèces.Ajoutez sales amount cash collected for sales of credit were made during the period précédente.Si the amount of credit sales company made during the reporting period is greater than what was collected from customers, then the account receivable accounts has increased during the period and the company has to subtract from the net income of this difference.

If the amount that they collected during this period is greater than sales of credit made accounts receivable decreased during the period and the accountant must add to the net income the difference between claims at the beginning of the period and the debt at the end of the same period.