A. What is an account receivable? What other names does it go by? Accounts receivable are amounts owed by customers on account. They result from the sale of goods and services on credit. These receivables are generally expected to be collected within 30 to 60 days. They are typically the most significant type of claim held by a company. Accounts receivable and notes receivable resulting from sales are also known as trade receivables. Accounts receivable resulting from sales are referred to
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cash balances have decreased. Accounts receivable and inventory have increased in this same time span‚ as well. Cash has decreased from $120.1 to $9.4‚ a decline of 92% (120.1 – 9.4 / 120.1) over the four year time span. The Accounts Receivable‚ during this same time‚ went from $90.6 in 2002 to $146.4 in 2005‚ an increase of 62% (90.6 – 146.4 / 90.6). Likewise‚ inventory has increased from $468.3 to $656.9‚ an increase of 40% (468.3 – 656.9 / 468.3). For accounts receivable (increase of 62%)‚ inventory
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procedures on an annualised basis and compared the results to industry averages and last year’s audited financial information. The results are given below : Airclean Sdn Bhd Industry Average Ratio 2012 2011 2012 1. Current ratio 1.7 2.2 2.7 2. Days in receivables 93 68 55 3. Inventory turnover ratio 4.3 5.5 5.8 4. Debt to equity ratio 47% 38% 30% 5. Gross margin 43% 35% 39% Required : (i) Discuss the conclusions that you can draw from the above ratios about Airclean’s financial position. (10 marks) (ii)
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Building C has the lowest present value which means that the lowest costs. E 7-2 (Determining Cash Balance) 1. Only checking account balance of $925‚000 should be reported as cash. Certificate of deposit $1‚400‚000 is a temporary investment‚ short – term paper (penalties to early conversion to cash). Cash advance to subsidiary of $980‚000 is treated as receivables (assumed to
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predetermined totals are used to control postings. D.(2)- As goods leave the shipping dock‚ the system generates a bill of lading and associated sales invoice‚ which is automatically recorded in the sales journal. 14-23 A. (4)- Debit entries in the accounts receivable master file are correctly supported by sales invoices. B. (4)- the shipping clerk’s file of duplicate copies of bills of lading. C. (2)- Vouch a sample of recorded sales from the sales journal to shipping documents. 14-24 1. a.Recorded
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in Retained Earnings ($15‚700 - $0) $15‚700 Add: Dividends 400 Profit $16‚100 PROBLEM SET A 2.2 (a) Bell Consulting Pty Ltd Assets Liabilities Equity Date Cash + Accounts Receivable + Supplies + Office Equipment = Bank Loan + Accounts Payable + Share Capital + Retained Earnings HAD GIVEN IN CLASS. $13‚800 + $1‚000 + $500 + $2‚400 = $5‚000 + $2‚400 + $10‚000 + $300
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confirming a client’s year-end accounts receivable (b) performing year-end sales cut-off tests. a) The primary audit objectives of confirming a client’s year-end accounts receivable include occurrence and accuracy of realizable value. Auditors would like to make sure that the transaction generating the accounts receivable actually occurs‚ and that the receivables are recorded at accurate value for the current reporting period. Usually they will send accounts receivable confirmations to client’s
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940. $3‚000. 3 of 25 The balance shown on a bank statement is always equal to the month-end balance of a company’s cash account in the general ledger. True False 4 of 25 The allowance for Doubtful Accounts is called a valuation account or contra-asset account and normally has a credit balance. True False 5 of 25 The allowance for Doubtful Accounts is an expense account and appears on the income statement. True False 6 of 25 In a perpetual inventory system‚ two entries usually are made to
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Assignment #3 Accounts Receivable and Credit Sales Part A--Optional Exercises 1. Credit Sales System Flowchart Peach Blossom Cologne Company Credit Sales system Flowchart December 31‚ 2009 2. Analysis of Internal Control Strengths CSF‑1 Peach Blossom Cologne Company Credit Sales System Internal Control Strengths Strength Segregation of Functions 1. Segregation among sales‚ stores‚ shipping‚ and accounts receivable. Authorization 2. Credit sales are approved before shipment
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new customer. Sales were increased significantly which in return also increased accounts receivable and inventory balances. This was a good decisions because as sales increase so does income. Additional accounts receivable and inventory can cause more overhead but can always be controlled. Leveraging Supplier Discounts With a new customer top-line growth was achieved. With the added expenses of more accounts receivable and inventory needs the cash flow for these three years was drained. It was however
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