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Posted On: 12/15/2018 2:44:32 PM
Post# of 40990
Can someone clarify this for me? I'm not sure if this statement is correct..
"The revenues of 1.3 million came out of the last accounts receivable and we added almost twice that in new sales."
It is basic accounting so hopefully someone can post definitively on this.
The way I understand it is when a sale is made and delivered, the company debits Accounts Receivable and credits Sales Revenues. So the sales this quarter did not come out of the A/R instead they were added to the A/R, thus the $1.2 million increase in A/R. However that means that only $100k was collected of the previous A/R balance.
I think I missing something but not sure. Responses welcome.
"The revenues of 1.3 million came out of the last accounts receivable and we added almost twice that in new sales."
It is basic accounting so hopefully someone can post definitively on this.
The way I understand it is when a sale is made and delivered, the company debits Accounts Receivable and credits Sales Revenues. So the sales this quarter did not come out of the A/R instead they were added to the A/R, thus the $1.2 million increase in A/R. However that means that only $100k was collected of the previous A/R balance.
I think I missing something but not sure. Responses welcome.
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