What Is Account Settlement?

Settlement account refers to the account set up to calculate and supervise settlement operations such as creditor's rights and debts between this unit and other units, individuals or affiliated units. Settlement accounts can be divided into three types: asset settlement accounts, liability settlement accounts and asset liability settlement accounts. The asset settlement accounts include "accounts receivable", "other receivables", and "reserve funds" and other accounts. The increase in creditor's rights is debited (or increased) to each account, and the number of credits (or deductions) to each account , The balance is on the debit side, indicating that the actual number of claims has not been recovered. ^[1]