Accounts Receivable
Posted by Steven in Accounts Receivable, name of the customer, purchase description
The accounts receivable or A/R is a sub ledger of the general ledger that lists money owed to the company by the customers and other sources. We should add here that a company with a very small group of customers might be able to keep all of those accounts in the general ledger. But this method would be unwieldy for most businesses , so accounts receivable are generally kept in sub ledger. That’s the fairly straight forward way to describe the A/R sub ledger, The good news is that there’s more , much more to A/R than that. The A/R system can be manual or automated. Either way , it must contain the necessary information to support the G/L and be useful to everyone reviewing or sing the information on the individual accounts it reflects. Each A/R sub ledger summary should include the following information which are the name of the customer – enough information to sufficiently identify the customer, purchase description- all information necessary to distinguish the items purchased from other items, date- when the transaction took place, Amount – how much the transaction was for, Sales Amount – The G/L account to which the transaction is to be placed, Cash – whether or not the customer paid the cash. These are the information serves as the basis for regular posting to the G/L whether entries posted daily Monthly or weekly.
