Accounts Receivable Journal Entries

Hello in this presentation we will be recording that journal entries for business transactions related to accounts receivable otherwise known as the revenue cycle. We will be recording these using debits and credits. At the end of this we will be able to list transactions involving accounts receivable record transactions involving accounts receivable using debits and credits and explain the effect of transactions on assets liabilities, equity, revenue, expenses and net income. We’re going to be recording these transactions up here on the left hand side constructing those journal entries in accordance with our thought process our list of questions to most efficiently construct the journal entries. We will then be posting them not to the general ledger but to this worksheet here so that we can see the quick calculation of the beginning balance and what is happening to the individual accounts as well. account types, in that we have the accounts categorized, as is the case for all trial balances. accounts have been in order that order been assets in this case in green, the liabilities in orange of the equity, light blue and the income statement accounts of Revenue and Expense Type accounts. first transaction perform work on account for $10,000.

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Receivables Introduction

In this presentation we will take a look at receivables. The major two types of receivables and the ones we will be concentrating on here are accounts receivable and notes receivable. There are other types of receivables we may see on the financial statements or trial balance or Chart of Accounts, including receivables, such as rent receivable, and interest receivable. Anything that has a receivable, it basically means that someone owes us something in the future. We’re going to start off talking about accounts receivable that’s going to be the most common most familiar most used type of receivable and that means something someone, some person some company, some customer typically owes us money for a transaction happening in the past, typically some type of sales transaction. So if we record the sales transaction, that would typically be the way accounts receivable would start within the financial statements, meaning If we made a sale, we would credit the revenue account, we’ll call it sales. If we sell inventory, it would be called sales. If we sold something else, it might be called fees earned, or just revenue or just income, increasing income with a credit, and then the debit not going to cash. But going to accounts receivable.

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Cash Disbursements Internal Controls

In this presentation, we’re going to talk about Cash Disbursements, internal controls. Now we’re going to talk about a voucher system for the payment process. But before we get too into the voucher system, note that the systems will change depending on the type of organization and what industry we’re in and how large the organization is. So if we just have a small organization, then we probably just want to have some internal controls for the owner of the company, the owner, being a key component of the internal control system and having a lot more oversight over many of the things that happened. For example, for the payments that happen, we may have someone that requests something on an employee that wants to request a payment may even you know, enter the payment into this system. However, we want to make sure that the owner still has some control over such as the cheque signing.

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Cash Receipts Internal Controls

 

In this presentation, we will talk about cash receipts, internal controls. Now we’re going to talk about a voucher system for the payment process. But before we get too into the voucher system, note that the systems will change depending on the type of organization and what industry we’re in and how large the organization is. So if we just have a small organization, then we probably just want to have some internal controls for the owner of the company, the owner, being a key component of the internal control system and having a lot more oversight over many of the things that happen. For example, for the payments that happen, we may have someone that requests something on an employee that wants to request the payment may even you know, enter the payment into the system.

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Cash Internal Controls Overview

In this presentation, we’re going to introduce the internal controls related specifically to cash, cash internal control goals, these are going to be the objectives of the internal control system over cash, we want to have the cash handling separate from the record keeping. So whoever is handling the cash, we would like to have them not be the same person doing the record keeping. And therefore we have that separation of duties. We have the person that is entering the data, not having as much of an incentive to steal the cash because they’re not the ones handling the cash, the people handling the cash, know that if they do steal it, the record keeping should pick that up, and they are a separate person. cash receipts are deposited to the bank. We want to make sure that the cash receipts are going to the bank as soon as possible, hopefully on a daily basis, so that we’re not actually emulating cash. We don’t want a cash to be piling up, because if it is then we have a greater risk of theft to happen and greater loss if that does happen.

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