Acaydia Aesthetics LLC Business Liquidity and Financial Health Discussion
Question Description
I’m working on a business discussion question and need an explanation to help me understand better.
respond to natalia with 200 words
The following are important factors when recording Receivables:
Credit sales
The primary factor in determining the volume of receivables is the level of credit sales. Increasing the credit sales will increase in the debtors and vice versa; therefore, credit sales are the factor of receivables.
Length of the credit period
The period allowed the customers to make payment
Cash discount
Customers should make immediate payments, and this discount is available only if the expense is less than the earnings.
Discount period
The amount of time you have to collect receivables is determined by the discount period you have.
Collecting credit information
Payment details should be appropriate, and consumer review should be thorough.
Credit analysis
Credit analysis gives information about the customer’s capacity and financial position.
Credit decision
After analyzing the credit report, a decision must be made. A journal entry should be recorded from the findings on the information. The entry should have the sale on the account; one must debit a receivable and
credit a revenue account. The customer must pay off their bills; one debits cash and credits the receivable.
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