Banking Activities as Controls

Banks are used by most companies for many different services. One of their most important services is helping companies control cash and cash transactions. Banks safeguard cash, provide detailed and independent records of cash transac­tions, and are a source of cash financing. (more…)

Accounting Comparisons

Recall that under a perpetual system, the Merchandise Inventory account is updated after each purchase and each sale. The Cost of Goods Sold account is also updated after each sale so that during the period the account balance reflects the periods total cost of goods sold to date. (more…)

Periodic Inventory System

A periodic inventory system requires updating the inventory account only at the end of a period to reflect the quantity and cost of both goods on hand and goods sold. It does not require continual updating of the inventory account. The com­pany records the cost of new merchandise in a temporary expense account called Purchases. (more…)

Accounts Receivable.

Money which is owed to a company by a customer for products and services provided on credit.
This is treated as a current asset on a balance sheet.
A specific sale is generally only treated as an account receivable after the customer is sent an invoice.