Category Archives: 1.07 Basic Entries

Accounting for crediting sales revenue

Crediting sales is something that happens no matter how hard you try and have your invoices correct, your goods shipped in correct amounts and items. There’s a factor you cannot monitor and that’s you customer for instance. They may decide they want something else, something additional and so on. Thus it’s important to understand that crediting sales is absolutely normal and it’s even more important to understand how one should do it instead of avoiding it.   Continue reading

Collection of a previously written down receivable

So there was a receivable you once considered was partly uncollectable. Be the reasons what they are, as it happens, you’ve accounted for the write down (note that you haven’t written the receivable off, but just merely down; that is you’ve accounted for an allowance against the positive asset thus diminishing your assets in total by the amount you considered you will not collect from your customer).   Continue reading

Recognising a receivable collection

Making a sale happen is one thing. You’ve accounted for the receivable from the sale, that’s another thing. Getting paid for the sale and collecting the receivable is entirely another matter. In one of our examples we accounted the receivable and we’ve been lucky enough that our client actually owned to what they had to pay and that’s what they did.  Continue reading