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loss or theft.
Good Internal Control Procedures over Accounts Receivable: • Require approval of customer's credit before a sale is completed. Customer credit should be
approved by the credit manager-NEVER the salesperson!
• Age accounts receivable and be proactive in collecting accounts that are past due
Receivables turnover ratio: Analyzes how quickly accounts receivable are collected in relation to
net sales. Net Sales/Average net trade accounts receivable
• Average Collection Period = 365/Receivables turnover
• Notes receivable: Usually longer term than an accounts receivable. • Has a written promissory note from a customer that the customer will pay the company.
• Principal: The amount loaned by the company that is owed to them.
• Interest: Revenue the company will earn from the debtor for loaning the money.
• Maturity date: date in which...
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