Business Administration 2257 Chapter Notes - Chapter 8: Subledger, Accounts Payable, Accounts Receivable

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Vicki Sweeney

Document Summary

Receivables are claims that are expected to be collected in cash, and are frequently classified as: accounts receivable, amounts owed by customers on account. Expected to be collected within 30 days and are classified as current assets: notes receivable, are claims where formal instruments of credit- a written promise to repay- are issued as evidence of the debt. The debtor pays interest and is for time periods of. Can be current or non-current assets depending on their due dates. Include nontrade receivables that do not result from the operations of the business. Can include interest receivable, loans to company officers, advances to employees etc. Service company: receivable is recorded when a service is provided on account. Merchandise company: receivable is recorded at the point of sale of merchandise on account. If buyer chooses to pay within the discount period, the seller"s account receivable is reduced in full by the amount of cash received plus the amount of the sales discount.