ACC 291 week 1 DQ 1in Accounting by jacob
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ACC 291 week 1 DQ 1
How would you describe the entries to record the disposition of accounts receivables?
What is their function?
Since the majority of US thrives on the use of credit cards, the accounts receivables for a company may no longer be on a cash-to-cash basis. A company may need to sell these accounts to other companies who specialize in handling accounts receivables if they need cash more quickly or if it would be too costly to perform the necessary billing to collect on the account.
The entries used to record the disposition when the receivables are sold to a factor often detail the cash receivedplus the service charge. The company can then balance their receivables account.
When a credit card company records a credit card transaction they detail the cash plus the service charge as well, then...