Information related to Pukalani Limited is presented below for its first month of operations. Credit Sales Cash Collections Jan. 7 Chiu Corp. $1,630 Jan. 17 Chiu Corp. $670 15 Elbaz Inc. 5,650 24 Elbaz Inc. 1,960 23 Lewis Corp. 3,630 29 Lewis Corp. 3,630 Post the above transactions individually to the accounts receivable subsidiary ledger for each customer, and in summary form at the end of the month to the accounts receivable control account in the general ledger. (If the ending balance is 0 enter that amount on the normal balance side for accounts receivable.) Accounts Receivable Subsidiary Ledger Chiu Corp Jan. 17 670 Jan. 7 1630 Jan. 17 Lewis Corp Elbaz Inc. General Ledger Control Account Accounts Receivable
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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.
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