Is it a credit memo issued by a vendor or a debit memo issued by a purchaser? What's the difference?

Q: Which one of the following documents is not needed to process a payment to a vendor?A. vendor…

A: Purchases of material and inventory is very important for the business. Payment for purchases can be…

Q: How might clustering be used to describe customers who owe money (accounts receivable)

A: Accounts Receivable account shows the list of customers of the business who have amount due to the…

Q: Explain how does the trade credit is offered on open account.

A: Trade credit is the easiest and most important source of short-term finance available to businesses.…

Q: What is a credit memo? Why it is used? Give an example?

A: Credit Memorandum: This is a document by the seller for the reduction in the amount owed by the…

Q: Describe the flow of data in the purchasing process that is initiated when the purchasing…

A: Purchasing process refers to the process of procurement of goods or inventory. It starts with the…

Q: Why do companies use sequential prenumbering for documents such as checks, sales invoices, and…

A: Pre numbered documents are a main feature of an internal control system. The pre numbering of…

Q: When a customer (buyer) returns merchandise purchased on credit,what is to be done?

A: Sales Returns: It is the merchandise returned by a buyer to a seller due to many reasons like excess…

Q: What are the normal balances of the various sales-related accounts?

A:

Q: Which of the following is NOT a financial transaction? a. purchase of products b. cash receipts c.…

A:

Q: From the following list, identify those that are likely to serve as source documents.  Trial…

A: A source document refers to the original document that includes all the information of the business…

Q: What should be in the credit file

A: Following is the contains in credit file

Q: posting from a sales journal to an accounts receivable ledger?

A: Sales journal is also referred as sales book or sales day book.  All the credit sales are recorded…

Q: In what way are sales to MasterCard and VISA customers recorded?

A: The Answer:

Q: 1. What would a credit manager do if a sales order received caused a customer to exceed its credit…

A: The credit manager should disapprove the sales order as it will increase the collection period…

Q: What purpose is served by prenumbering sales orders, shipping documents, and sales invoices?

A: Revenue Cycle: Revenue cycle records all the transactions that originate from selling a product and…

Q: Which is not a book reconciling items? A. Credit Memo B. NFS Checks C. Debit Memo D. Outstanding…

A: The bank reconciliation statement is prepared to to record and equate the book balance and bank…

Q: How is a credit check in the advanced technology system fundamentally different from a credit…

A: Definition:   Credit check: Credit check is defined as the process of examining the financial…

Q: Why should cash receipts from credit clients and sales to them be instantly documented and posted?

A: Introduction: Accounting focuses on recognizing, documenting, measuring, and summarizing…

Q: In a manual accounting system, what advantage does the journal voucher system have over the…

A: Journal  Voucher Journal voucher is a special source of document which has been replaced for general…

Q: How did you get Accounts Receivable and Sales?

A: Account receivable is the amount which is to be received from the customers or the customers who…

Q: Explain “Sales Returns and Allowances”. Why does this account have a normal debit balance?

A: Sales Returns and Allowances Sales Return and Allowances is actually a contra revenue account (i.e.…

Q: According to the Revenue Cycle Flowcharting Process, the "Pure Credit Sales" portion of the credit…

A:

Q: When does Accounts receivable are created?

A: Current assets: The assets which could be converted into cash within one year like accounts…

Q: What would a credit manager do if a sales order received caused a customer to exceed its credit…

A: When orders are received from new customers, the system automatically accesses the credit rating…

Q: Which one of the following documents is used to record notes receivable? Register Voucher Promissory…

A: Note means an instrument acknowledging as debt due from one party to another party. It carry defined…

Q: What internal controls would you implement to help maintain control of your credit sales and…

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Q: What is a T-account? On which side is the debit? On which side is the credit? Where does the account…

A: Debits are recorded on the left and credits are recorded on the right side of a T-account with the…

Q: What is the journal entry for recording credit sales? a. Cash Dr. and Sales Cr b. Sales Dr. and…

A: Journal entry for Recording credit sales: Accounts Receivable [Debit]          Sales [ Credit]

Q: What are the feature of Receipt and Payment Account?

A: Receipt and Payment Account is a summary of cash Receipts and payments in an accounting period. Not…

Q: When a cxompany extends credit directly to a customer for a purchase, the sale is recorded as a…

A: Sales can be in cash or credit. Cash sales amount is received immediately and credit sales amount is…

Q: If merchandise purchased on account is returned, the buyer can inform the seller of the details by…

A: An invoice refers to a bill that is issued by a seller to the buyer. It specifies details related to…

Q: Goods returned by customer will be debited to which account?

A: When a customer returns the goods sold to him it is called sales return i.e. it reduces the income…

Q: What accounts are affected when a bill from a vendor supplying you products is recorded

A: when vendors supply products to the company the following accounts will be affected -   1) if we are…

Q: Why should the function of requisitioning the purchase of goods be segregated from the function of…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Why do you think businesses extend credit to customers thereby creating accounts receivable?

A: Account receivable means where goods has been sold on credit and amount has not been received.…

Q: Describe the data flow in the buying process that begins when the purchasing organization sends a…

A: The Answer:

Q: Which accounts commonly requires both debit and credit entries?

A: Debit and credit sides are two sides of a general ledger account. Normally all assets and expenses…

Q: What is the objective of having a control system and what is the key points of a credit control…

A: Internal control:   Internal control can be defined as a process to ensure achievement of the…

Q: Which pair of accounts has the same set of rules for debit and credit entries?

A: Modern Approach of Classification of Accounts Under the modern approach of accounting, accounts are…

Q: Which files do you usually find in a sales order module versus an accounts receivable (customer)…

A: Sale is the outflow of the commodities or the inventory held with the business entity to generate…

Q: How a credit check in advanced technology system different from a credit check in basic technology…

A: Credit Check:   Credit check is defined as the process of examining the financial behavior of a…

Q: Why should sales to and receipts of cash from credit customers be recorded and posted immediately?

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: Describe the flow of data in the purchasing process that is initiated when the purchasing…

A: A data flow diagram is a flow of data that analyzes the beginning criteria and end results of a…

Q: True or False: The posting of purchase transactions to the general ledger is done in the same manner…

A: Purchase transactions are the transactions relating to the procurement of goods from the party…

Q: What steps are followed in posting from the sales journal to the accounts receivable ledger?

A: Sales Journal A journal is a book of original entry where all journal entries are recorded on the…

Q: Why should cash receipts and sales to credit clients be documented and reported immediately

A: The Answer: