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Accounts Receivable

Accounts receivables represent a contractual right to receive cash or assets from customers arising from the sale of goods or services in the normal course of business. They are initially recorded at the original invoice amount but subsequently measured at their net realizable value to account for amounts that may not be collected. Trade receivables specifically refer to claims from normal business operations like a rice store selling rice, while non-trade receivables come from other sources like selling store equipment. Trade receivables are classified as current assets if expected to be collected within a year or the normal operating cycle, whichever is longer, while non-trade receivables are current if collected within a year and non-current if collected beyond a year.

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260 views2 pages

Accounts Receivable

Accounts receivables represent a contractual right to receive cash or assets from customers arising from the sale of goods or services in the normal course of business. They are initially recorded at the original invoice amount but subsequently measured at their net realizable value to account for amounts that may not be collected. Trade receivables specifically refer to claims from normal business operations like a rice store selling rice, while non-trade receivables come from other sources like selling store equipment. Trade receivables are classified as current assets if expected to be collected within a year or the normal operating cycle, whichever is longer, while non-trade receivables are current if collected within a year and non-current if collected beyond a year.

Uploaded by

Apple Nerry Mercado
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Accounts Receivable

Receivables are financial assets that represent a contractual right to receive cash or another
financial asset from another entity.
Ex. Utang ng customer sa entity o utang ng empleyado sa entity or utang another entity
dun sa business entity
ACCOUNTS RECEIVABLES are open accounts arising from sale of merchandise or services in the ordinary
course of business.
So yung mga utang ng customer arising from normal operation ng entity is normally nirerecord as
Accounts Receivables.
Accounts Receivables shall be measured initially at face value or original invoice mount. Meaning Kung
magkano ang invoice amount yun yung initially measurement ng account receivables However,
subsequently the accounts receivables shall be measured at the net realizable value, meaning the
amount of cash expected to be collected
Meaning May mga instances na hindi lahat ng acoount receivables ay nakokolekta ng entity.

For retailers or manufacturers, receivables are classified into trade and non-trade receivables.
Trade Receivables refer to claims arising from sale of merchandise or services in the ordinary course of
business
For example, Sales of merchandise ang business entity ay ricestore at ang ordinary
course ng business ay pagtitinda ng panindang bigas therefore ang trade receivables dun yung mga
utang ng customer from selling ng mga bigas ng rice store.
Accounts Receivables
Are open accounts or those not supposed by promissory notes. Other names are customers’
accounts, trade debtors and trade accounts receivables
Account receivables ay normally hindi supported ng promissory notes supported siya ng sales
invoice delivery receipts, customer purchase orders. So yun yung tinatawag na acc receivables na
normally nag aarise sa normal operation ng isang business.
Notes Receivables
Are those supported by a formal promise to pay in the form of notes
So ang Notes Receivables ay supported siya ng promissory notes
Non-trade Receivables
Represents claims from sources other than sale of merchandise or services in the ordinary
course of business
Ex. Ang Business entity is Rice store tapos binenta niya yung isa sa kanilang timbangan na
ginagamit pang timbang sa mga binebentabg bigas ang receivables arising from selling their timbangan
is considered as non-trade receivables. Non trade yun kase di naman normal operation ng rice store na
magbenta ng timbangan. For example sa services ay laundry shop ulit tapos binenta nila yung isang
washing machine yung receivable arising sa pagbebenta ng washing machine is considered din as non-
trade dahil hindi rin normal operation ng isang laundry shop ang magbenta ng washing machine

CLASSIFICATIONS OF RECEIVABLES
TRADE RECEIVABLES which are expected to be realized in cash within the normal operating cycle or one
year, whichever is longer, are classified as current assets.
Is expected to be realized in cash meanng expected na mokokolekta within the normal
operating cycle.
NON-TRADE RECEIVABLES which are expected to be realized in cash within one year, the length of the
operating cycle notwithstanding are classified as currents assets. If collectible beyond one year,
nontrade are classified as non-current assets
Ang trade receivables is basically currents assets z ang nontrade re kapag collectible with one
yearor collectible within the operating cycle of the entity ang nontrade re is classified as current assets.
If collectible beyond one year non trade are classified as non-current assets. So ang non trade kapag
collectible beyond year classification ay non-curren assets

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