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Accounting for Credit Sales - Accounts Receivable

IThe analysis of credit sales is quite straightforward. The credit sale of merchandise for $100 would increase accounts receivable and shareholders’ equity.

When the cash is ultimately collected, the balance in cash is increased,and the accounts receivable balance is decreased.

Notice that revenue is recognized when the sale is made.The collection of cash does not result in the recognition of revenue. Rather, it merely transforms one asset (accounts receivable) into another (cash).

• Credit Sales
• Accounting for Credit Sales
• Discounts
• Factoring Accounts Receivable
• Uncollectible Accounts
• Analysis of Accounts Receivable
• Implications for Managers in Accounts Receivable

Current Assets Topics

• Cash and Cash Equivalents
• Marketable Securities
• Accounts Receivable
• Inventory
• Prepaid Expenses