Calculate the cost (as a percentage) to Satner Limited of not accepting discounts from creditors in settlement of accounts. Notes: Inventories as at 31 December 2020 amounted to R185000 All purchases and sales are on credit Credit terms to Debtors are 30 days Credit terms of 3/10 net 90 days are granted by creditors Dividends for the year amounted to R139 503
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question 2.4
Calculate the cost (as a percentage) to Satner Limited of not accepting discounts from creditors in settlement of accounts.
Notes:
Inventories as at 31 December 2020 amounted to R185000
All purchases and sales are on credit
Credit terms to Debtors are 30 days
Credit terms of 3/10 net 90 days are granted by creditors
Dividends for the year amounted to R139 503
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