What is accounts receivables?

Accounts receivables.

Accounts receivables is the money that the business has the right to receive it after the business had provided the other party either goods or services. The accounts receivables are also known as trade debtors where the business engages the activity of selling its goods or services to its customers on credit.

The sales made by cash or by cheque is simple. We just give our customer the goods and we receive money, either cash or cheque. But, when we deal with our customer, asking them to buy or to promote them to buy and we offer them a credit, where they take the goods first and then they will settle the payment later or at a agreed specified date. If this is the case, then we’re having a credit sales. Now, we have persons who owe us money.

A credit sales will eventually creates an account. An account that we are able to receive. That is why we call the person who owe us money an account receivables or a trade debtor. A debtor that comes from a trade activity. it falls under an asset category, specifically under a current asset category. Why? Because this accounts receivable is the person who us money, so, that is our money, they are holding our money. We see them walking around, we see our money in them. That’s is why accounts receivables is an asset.

What is the difference between a person who owe us money but not from the trading transaction?

A person who us money for some other reasons besides trading is known as debtors or we can put them as our sundry debtors. For example, Jack approached us to borrow some money. Since we don’t have some money in our pocket, we decided to lend him some from the business money. So you took some cash from the business and gave it to him. (Please don’t do this, it is not ethical!). Here, you have to record a transaction for the money you took just now from the business. Jack will be our sundry debtors, not an accounts receivables because he didn’t do any trading with us neither buy or sell. So, Jack will be classified under current asset specifically as sundry debtor.

The above concept can also be applied to accounts payable. Just think of the opposite. Okay?

 

Ok see ya later!

Applicable to #ACC1231, #BUS1233, #CBA1133, #DOM2234

BUACC1507 – Sayonara and Short exercise

Awkward right? Its not me but its them…. What I know now is that, I have to let go the class and replaced it with another class. The tossing game will keep on going until they resolved their inefficiency.

So, this maybe my last exercise for you…. till then, see you and bye!

Exercise 1

Enter the following transactions in the books of Muhaimin:

March 1             Started firm with RM50,000 cash

March 3             Deposited RM20,000 cash into a bank account

March 5            Bought stock on credit for RM8,600 from Mustakizah

March 7             Bought office equipment for RM12,000 paying by cheque

March 9             Returned stock worth RM3,000 to Mustakizah

March 11          Sold goods on credit to Farhana for RM4,800

March 13          Purchased office fixtures on credit from Afiq Supplies for RM4,600

March 15          Farhana returned goods worth RM2,000

March 17          Muhaimin settled his account with Mustakizah by sending cheque for RM2,600

March 19          Muhaimin brought in a personal computer to the business worth RM5,200

 

Exercise 2

Construct the ‘T-account’ for the following transactions in the books of Mr Bob:

Mr Bob started a textile business on 1 January 2018. He later put RM60,000 into the business bank account. Below are the transaction relating to the business for the month of January 2018. He also rent shop premise from En Rafiq for RM2,000 whom he paid by cheque. He bought a machine RM3,000 and shelves under fixtures and fittings for RM4,000, all of those were paid by cheque. The rest of the transaction occurred in the month of January 2018;

 

RM

Jan 2

Bought goods for resale from Bothina Boutique by cheque

5,000.00

Jan 3

Withdrew cash from bank for business use

1,500.00

Jan 4

Bought goods for stock from Nor Fadzlina Fashion by cash

600.00

Jan 5

Sold to Shamsuddin Shoppe for cash

1,300.00

Jan 6

Sold to Batek Husna Enterprise on credit

3,700.00

Jan 7

Returned some goods to Bothina Boutique

300.00

Jan 8

Batek Husna returned goods

400.00

Jan 9

Cash sales to Faezah

1,500.00

Jan 11

Cash payment to Bouthina Boutique

800.00

Introduction to Accounting for CBA1133, ACC1231, DOM2234 and BUACC1507

Assalamualaikum and dear students,

 

Before we proceed even further into the subject, I want you guys to browse through the internet and read something about accounting. This will give you some ideas on the  accounting journey that we going to embark for the next couple of months. I also pinned us some simple introduction videos regarding accounting. The rest I am still working on it.

I will try my best to make this subject interesting and of course with the help of you guys, this subject will be even great.

Enjoy this video and we shall discuss further in class…