What is pure receivables?

Receivables with net accounts are the difference between the current claims of the Company and the contribution to dubious accounts. Companies create a contribution to dubious accounts because they do not expect to collect 100 percent of their receivables accounts. There are two methods to create a contributory part of the net receivables. The percentage of credit sales or the amount of dollar from old receivables are the two most common calculation methods. Companies can use any method creates the most accurate number. Most companies will internally maintain the balance of receivables on their books. Accountants will maintain balance and age by date. Most aging reports report unpaid balances in 30 -day additions. Aging reports will be listed all balances in the categories called Current, 30 -day, 60 -day, 90 days old and 120 days. Provided sales methods must review their previous collections of receivables. This usually causes a percentage of credit sales that have not been for some timeU Nevykířány. The accountant will multiply the current credit sales by this percentage and determine the dollar amount of the receivables will be impregnable. Enrollment in the magazine published on the main book will be debit costs on Bad Debts and credit post for doubtful accounts for the calculated picture.

Another calculation method is to set a number based on a report on the aging of receivables. For example, accountants can simply take all open accounts 120 days old and older and publish this amount as a post to dubious accounts. The sum of all these accounts is published in the company's main book using the same magazine record that was presented earlier. This process can be a monthly item in Order to introduce the most accurate net receivable accounts for the financial statements.

Creating a post to dubious accounts does not mean that it is not impossible for society to collect these excellent balances. A receivable with clean accounts is oneThe calculation to create accuracy in financial reporting. If the Company collects an open account that has been written off on poor debts, the accounting will have to reverse the initial diary item. This record is a debit contribution to dubious accounts and a loan at the cost of careless debts. The accountant can then publish a collection of outstanding debt and remove a claim from the company's books.