70) On July 8, Ray Inc. sold 100 printers to Office Rental Company at $600 each and offered a 2% discount for payment within 10 days. On July 15, Office Rental Company paid the full amount in cash. What should Ray Inc. record on July 15? A. Cash B. C. Accounts Receivable Cash Accounts Receivable Cash Sales Discounts Accounts Receivable D. Cash Sales Discounts Sales Revenue 60,000 58,800 58,800 1,200 60,000 60,000 58,800 60,000 1,200 58,800
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Please answer the following 2 questions:
Journal Entry :— It is an act of recording transaction in books of account when transaction occurred.
Adjusting Entries :— These are journal entries that are passed at the end of the accounting period to adjust the balance of expenses and revenues account.
General Rule:—
- Debit the receiver, credit the giver.
- Debit what comes in, credit what goes out.
- Debit all expenses & losses, credit all incomes & gains.
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