BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Billed a client for rendered services
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Ordered Office Supplies
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Received cash from customers billed last month.
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Received a bill from the Daily News for advertising the business
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Detailed explanation-1: -Cash receipts are the collection of money (cash) from your customers. These increase the cash balance recognized on a company’s balance sheet. They can be generated by either sales or collections. Cash receipts can be a tricky concept to understand.
Detailed explanation-2: -Whenever money is collected from a previously billed customer, the corresponding amount is credited to accounts receivable account. Moreover, same amount is also debited to the cash account. An increase in asset is recorded as a debit entry and a decrease in asset is recorded as a credit entry.
Detailed explanation-3: -An accounting system must record all business transactions to ensure complete and reliable information when the financial statements are prepared. A business transaction is an activity or event that can be measured in terms of money and which affects the financial position or operations of the business entity.
Detailed explanation-4: -What Is a Back Charge? A back charge is a billing made to collect an expense incurred in a previous billing period. It can be due to lack of payment by the recipient of services or goods, an adjustment due to an error, or to collect an expense that was not billable until a later period due to timing issues.