In most businesses, what drives the balance sheet are sales and expenses. In other words, they cause the assets and liabilities in a business. One of the more complicated accounting items are the accounts receivable. As a hypothetical situation, imagine a business that offers all its customers a 30-day credit period, which is fairly common in transactions between businesses, (not transactions between a business and individual consumers).
An accounts receivable asset shows how much money customers who bought products on credit still owe the business. It's a promise of case that the business will receive. Basically, accounts receivable is the amount of uncollected sales revenue at the end of the accounting period. Cash does not increase until the business actually collects this money from its business customers. However, the amount of money in accounts receivable is included in the total sales revenue for that same period. The business did make the sales, even if it hasn't acquired all the money from the sales yet. Sales revenue, then isn't equal to the amount of cash that the business accumulated.
To get actual cash flow, the accountant must subtract the amount of credit sales not collected from the sales revenue in cash. Then add in the amount of cash that was collected for the credit sales that were made in the preceding reporting period. If the amount of credit sales a business made during the reporting period is greater than what was collected from customers, then the accounts receivable account increased over the period and the business has to subtract from net income that difference.
If the amount they collected during the reporting period is greater than the credit sales made, then the accounts receivable decreased over the reporting period, and the accountant needs to add to net income that difference between the receivables at the beginning of the reporting period and the receivables at the end of the same period.
Sunday, October 23, 2011
Tuesday, April 22, 2008
Forex news 22 April 2008
 Turkish Press | Forex - Euro remains well bid as ECB comments bolster rate ... CNNMoney.com 'The special liquidity scheme has been quickly seen by the forex market for what it is - simply another central bank initiative to add liquidity to the ... |
 Turkish Press | FOREX-Euro dips as banking jitters surface in Germany Reuters By Simon Falush LONDON, April 22 (Reuters) - The euro retreated from a record high versus the dollar on Tuesday as concerns about the European banking ... |
Syngenta Q1 sales beat forecasts driven by forex, price hikes Forbes, NY BASEL (Thomson Financial) - Swiss agribusiness group Syngenta AG. reported forecast beating sales for the first quarter 2008 of $3.789 billion, .. |
CORRECTION Forex - US dollar softer in Sydney morning trade CNNMoney.com SYDNEY, (Thomson Financial delivered by Newstex) -- The US dollar was softer against other major currencies in Sydney morning trade Tuesday ... |
Windsor Brokers will participate in the 3rd ME Forex Expo in Bahrain ArabianBusiness.com (press release), United Arab Emirates Windsor Brokers offers investors multiple investment options that include trading in Forex, Precious Metals, Energies, Stock Indices and CFDs all under one ... |
Kenya: Forex Bug Bites Wealth Hunters AllAfrica.com, Washington Jane Kendi trains a budding forex investor. The trade is not meant for the faint-hearted because it is extremely risky. At 3 am when most people are deep ... |
Major forex conference set to open in Bahrain Trade Arabia, Bahrain International money experts will focus on currencies trends and forex trading at a major conference which opens in Bahrain tomorrow (April 23). ... |
Papademos says ECB, G7 worried about economic effects of forex ... Forbes, NY STRASBOURG, France (Thomson Financial) - European Central Bank vice-president Lucas Papademos said the bank, along with the G7, is concerned about the ... |
Daily Forex News & Commentary - ACM Forex Hound, NY As forex specialist, ACM provides only currency and precious metals trading via highly professional forex trading software. All customers are aware that ... |
 Bernama | FOREX: Ringgit Hits New 10-year High Against US Dollar Bernama, Malaysia Forex players are starting to sell the dollars ahead of the US Federal Open Market Committee meeting this April 31, on expectations of another cut in the ... |
Friday, November 2, 2007
Namecheap Discount Coupon November 2007 | Business Blog
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Thursday, October 25, 2007
40+ Places to Promote Your Blog for Free | Business Blog
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Chrysler contract closer to ratification - Yahoo! News
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VMware's strong 3Q impresses Wall Street - Yahoo! News
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Honda jumps on Accord, CR-V sales - Yahoo! News
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Hyundai profit up as strike-free quarter boosts output - Yahoo! News
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