Revenue and receivables

In most organizations, due to the balance of revenues and expenses. In other words, the assets and liabilities of a company. One of the most complex balance sheet items are the debtor. In a hypothetical situation, imagine a company that offers all customers a credit of 30 days, the relatively common in transactions between companies, (not transactions between a business and residential customers).

Assets of the debtor shows how much money customers bought the products on credit, but for society. It is a promise, if the company receives. Basically, the demand of the amount of revenue is waived by the end of the accounting period. Cash will not increase until the company actually receives money from customers of his company. However, the amount of money in the demands of total sales are in the same period. The company generated sales, but no money from the sale yet. Revenue is then equal to the sum of the acquired company.

For the actual cash flow, the accountant, the sales are not credited in the revenue subtract cash. Then add the amount of the money collected from sales of loans made in the previous period. If the credit is revenue of the entity during the reporting period, higher than the customer was billed, then the increased demand over the period and the company must subtract the difference between net income.

If the amount collected during the reporting period is greater than the credit is revenue made, then, accounts receivable decreased during the period, and the meter with a net profit of the difference between the tasks at the beginning of the collected must be added the period and receivables at end of period.