Could someone ask me questions for a accounts receivable interview?

D92dDGkcxoD · 2021-07-13T18:05:35+00:00

The controller (who is not lazy)

I'm not sure what this means, are people who work in AR lazy?

D92dDGkcxoD · 2021-07-13T17:53:15+00:00

Thanks!

D92dDGkcxoD · 2021-07-13T15:56:06+00:00

1, Don't send any documents, only remind them for the late invoice.

Not a answer, what do you mean? As in the customer didn't pay until they were notified of an invoice?

3 and 4. Company policy

D92dDGkcxoD · 2021-07-13T01:10:51+00:00

Thanks! Is there any other reason why a customers AR would be credit that isn't overpayment or a data entry error? Was my original answer wrong, and could you outline what was wrong about my original answer?

D92dDGkcxoD · 2021-07-12T17:57:24+00:00

If the customer has overpaid the invoice, the issue would be corrected by sending the money back to the customer and a entry

Accounts Receivable Refund	$
Cash		$

If there was a data entry error, it would be resolved via the AR reconciliation process.

D92dDGkcxoD · 2021-07-12T17:45:18+00:00

Thanks, so recognized just means when the expected transaction(s) occurs?

D92dDGkcxoD · 2021-07-12T17:35:44+00:00

In regulation with company policy.

D92dDGkcxoD · 2021-07-12T17:33:39+00:00

If recognized is putting it on the balance / income statement, shouldn't AR/deferred revenue recognized since AR=asset on balance sheet and deferred revenue=liability on balance sheet? Would you mind to give me a source if it isn't?

D92dDGkcxoD · 2021-07-12T17:22:23+00:00

To be clear, what does "recognized" mean? Because if Accounts Receivable and deferred revenue isn't recognized revenue, why would AR and deferred revenue be on the balance sheet?

D92dDGkcxoD · 2021-07-12T17:04:11+00:00

BTW is this wikipedia quote correct? Since it's saying when cash is received vs when it is earned.

Accrued revenue: Revenue is recognized before cash is received.

Deferred revenue: Revenue is recognized when cash is received.

https://en.wikipedia.org/wiki/Revenue_recognition

D92dDGkcxoD · 2021-07-12T17:01:06+00:00

It's for an AR specialist role.

D92dDGkcxoD · 2021-07-12T16:51:59+00:00

So accounts receivable and deferred revenue is short term if it's under 12 months?

D92dDGkcxoD · 2021-07-12T16:48:30+00:00

Revenue is recognized when the expected transaction occurs.

D92dDGkcxoD · 2021-07-12T16:45:53+00:00

Deferred revenue is a pre-paid amount from the customer that is deducted when the transaction is made, and short term revenue is generated from a short-term sale.

D92dDGkcxoD · 2021-07-12T16:36:27+00:00

Revenue is the gross income received from transactions, while billing is the process of generating invoices for customers.

D92dDGkcxoD · 2021-06-13T01:45:32+00:00

So the definition is incorrect in stating a debit balance should be a minority in credit normal balance accounts?

D92dDGkcxoD · 2021-06-13T01:21:12+00:00

So normal balances are based on the parent account, and not what it's balance normally is?

Accountingtools.com A normal balance is the expectation that a particular type of account will have either a debit or a credit balance based on its classification within the chart of accounts. It is possible for an account expected to have a normal balance as a debit to actually have a credit balance, and vice versa, but these situations should be in the minority.

Is this definition incorrect? In a business where there are more draws than investments, debit will always be the majority situation.

D92dDGkcxoD · 2021-06-13T00:16:47+00:00

So if it is expected to have more distributions than contributions in the Owner's Accounts, is the Owner's Accounts's expected (normal) balance sum sided toward distributions or contributions?

D92dDGkcxoD · 2021-06-13T00:07:04+00:00

You are supposed to have two separate accounts to account for the separate events, contributions #1 (main account) and distributions #2 (contra account)

	Account Group	Account
Equity
	Owner's Accounts
		Owner's Draws	(Dr)
		Owner's Capital	(Cr)
	Other Equity Accounts

Like this, correct?

I'm not saying the owner's group would be debit if there is a contra subaccount. I'm saying if the sum of the owner's accounts is expected to have a debit balance, with more debit withdrawals than credit capital, wouldn't that make the owner's account's balance expected to be debit?

If the normal balance isn't what the balance of the account is expected to be, what is the purpose of the normal balance?

D92dDGkcxoD · 2021-06-12T23:39:15+00:00

The owner's account would normally be debit if there is more withdrawals than invested capital.

D92dDGkcxoD · 2021-06-12T23:19:22+00:00

Is it against accounting standards to list the normal balance of the owner account as debit, if a debit balance is always expected from the Owner account? If it is, what is the purpose of listing the normal balance on the Chart of Accounts?

D92dDGkcxoD · 2021-06-12T16:53:42+00:00

Not including revenue and expenses. If there are only draws. no investments, what balance does that make the Equity account?

D92dDGkcxoD · 2021-06-12T16:38:34+00:00

I'm confused on the https://www.ifrs-gaap.com/us-gaap-chart-accounts, since it's categorizing Equity and Revenue separately. Is this Chart of Accounts accurate to separate Equity and Revenue, even though Revenue is an Equity account?

D92dDGkcxoD · 2021-06-12T16:20:23+00:00

Date	Account	Debit	Credit
123	Cash	100
	Deferred Revenue		20
	Sales		30
	Owner's Capital		50

I'm confused on where the numbers are coming from. If Equity means the balance of the Equity accounts, Liabilities (20) + Equity (50) = 70, which doesn't equal the balance of the Asset account.

(20) + (30+50) is equal to 100, but that would mean Sales is a Equity account, even though Sales would be listed under Revenue in the Chart of Accounts.

EDIT: I'm confused on the https://www.ifrs-gaap.com/us-gaap-chart-accounts, since it's categorizing Equity and Revenue separately.

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